
\ 



y 


> 


« 

* 


I 


% 


I 




t 








i 






' « 

' 9 





» - 







u 


% 


S 


✓ 






t 



\ 

^ \ 


\ 


\ 

V 


'V 



\ 

I 




i 









MESSAGE 

OF THE P RE S I D ENT OF 
T H E U N IT E D S T A T E S 

—- TRANSMITTING —-." ' . ■ 

THE ANNUAL REPORT OE THE POST¬ 
MASTER GENERAL EOR THE FISCAL 
YEAR ENDED JUNE 30,1911 « ANp 
THE REPORT OE THE COMMISSION 
ON SECOND-CLASS MAIL MATTER 

COMMUNICATED TO THE TWO HOUSES 
OF CONGRESS : : ; : FEBRUARY 22, 1912 


WASHINGTON; 1912 


















u.^.. iqp^- 

MESSAGE 


OF THE PRESIDENT OF THE 
UNITED STATES 

TRANSMITTING 

7^ / 


THE ANNUAL REPORT OF 
THE POSTMASTER GENERAL 
FOR THE FISCAL YEAR 
ENDED JUNE 30,1911 


THE REPORT OF 
THE COMMISSION ON SECOND- 
CLASS MAIL MATTER 


COMMUNICATED TO THE 
TWO HOUSES OF CONGRESS 
FEBRUARY 22, 1912 ' 


WASHINGTON 

1912 












.1 


n ??? B. 

23 W9 



» ^ 



MESSAGE. 


To the Senate and House of Representatives: 

In transmitting the annual report of the Postmaster General 
for the fiscal year ended June 30, 1911, it gives me pleasure to 
call attention to the fact that the revenues for the fiscal year 
ended June 30, 1911, amounted to $237,879,823.60 and that the 
expenditures amounted to $237,660,705.48, making a surplus of 
$219,118.12. For the year ended June 30, 1909, the postal serv¬ 
ice was in arrears to the extent of $17,479,770.47. In the inter¬ 
val this very large deficit has been changed into a surplus, and 
that without the curtailment of postal facilities. Indeed, in 
the same time there have been established 3,744 new post 
offices, delivery by carrier provided in 186 additional cities, 
and new rural routes established, 2,516 in number and aggre¬ 
gating 60,679 miles in extent. The force of postal employees 
has been increased by more than 8,000, and a liberal policy in 
the matter of salaries has been followed, so that the amount 
expended for salaries is now $14,000,000 more than two years 
ago. The average salary has been increased from $869 to 
$967 for rural carriers, $979 to $1,082 for post-office clerks, 
$1,021 to $1,084 for city letter carriers, and $1,168 to $1,183 for 
railway postal clerks. 

The report shows that the postal-savings system was begun 
experimentally in January, 1911, and that it has now been ex¬ 
tended so as to include 7,500 presidential post offices, which 
includes practically all of the post offices of that class. Prepa¬ 
rations are also being made to establish the system at about 
40,000 fourth-class offices. The deposits in 11 months have 
reached a total of $11,000,000, distributed among 2,710 national 
and State banks. 

The Postmaster General recommends, as I have done in pre¬ 
vious messages, the adoption of a parcel post, and the begin- 

(m) 



IV 


ning of this in the organization of such service on rural routes 
and in the City Delivery Service first. 

The placing of assistant postmasters in the classified service 
has secured greater efficiency. It is hoped that the same thing 
may be done with all the postmasters. 

The report of the Postmaster General is full of statements of 
the important improvements in the organization and methods 
of the postal service made since the last annual report, and of 
tentative drafts of legislation embodying certain recommenda¬ 
tions of the department which need legislation to carry them 
out. 

There is only one recommendation in which I can not agree— 
that is one which recommends that the telegraph lines in the 
United States should be made a part of the postal system and 
operated in conjunction with the mail system. This presents a 
question of Government ownership of public utilities which are 
now being conducted by private enterprise under franchises 
from the Government. I believe that the true principle is that 
private enterprise should be permitted to carry on such public 
utilities under due regulation as to rates by proper authority 
rather than that the Government should itself conduct them. 
This principle I favor because I do not think it in accordance 
with the best public policy thus greatly to increase the body of 
public servants. Of course, if it could be shown that telegraph 
service could be furnished to the public at a less price than it is 
now furnished to the public by telegraph companies, and with 
equal efficiency, the argument might be a strong one in favor 
of the adoption of the proposition. But I am not satisfied from 
any evidence that if these properties were taken over by the 
Government they could be managed any more economically or 
any more efficiently or that this would enable the Government 
to furnish service at any smaller rate than the public are now 
required to pay by private companies. 

More than this, it seems to me that the consideration of the 
question ought to be postponed until after the postal savings 
banks have come into complete and smooth operation and after 
a parcels post has been established not only upon the rural 
routes and the city deliveries but also throughout the depart¬ 
ment. It will take some time to perfect these additions to the 


V 


activities of the Post Office Department, and we may well await 
their complete and successful adoption before we take on a 
new burden in this very extended department. 

I can not speak with too great emphasis of the improvement 
in the Post Office Department under the present management. 
The cutting down of cost, the shortening of methods, and the 
increase in efficiency are shown by the statistics of the Annual 
Report. 

One of the most important matters referred to by the Post¬ 
master General is the proposed fixing of new rates of postage 
for second-class mail matter. In connection with this subject, 
I have the honor to transmit herewith the report of the Com¬ 
mission on Second-Class Mail Matter, appointed pursuant to a 
joint resolution of the Sixty-first Congress, approved March 4, 
1911. 

The commission consists of Hon. Charles E. Hughes, Asso¬ 
ciate Justice of the Supreme Court of the United States; Presi¬ 
dent A. Lawrence Lowell, of Harvard University; and Mr. Harry 
A. Wheeler, president of the Association of Commerce of the 
city of Chicago, whose character, ability, and experience com¬ 
mand for their findings and recommendations the respect and 
confidence of the Congress and the country. 

The report discloses a most exhaustive and critical inquiry 
into the subject of second-class mail matter after adequate 
notice to all the parties in interest. Extensive hearings were 
held by the commission, at which the Postmaster General and 
the Second and Third Assistant Postmasters General appeared 
and submitted formal statements presenting the various conten¬ 
tions of the Post Office Department, together with all the rele¬ 
vant official data and evidence relating to the cost of handling 
and transporting second-class mail matter. Certain of the lead¬ 
ing magazines were represented by counsel, while various other 
publications appeared by representatives and were heard in 
oral argument or permitted to submit written briefs setting 
forth their respective reasons for opposing a change in the 
present postage rate on second-class mail. The Second and 
Third Assistant Postmasters General, together with minor offi¬ 
cers of the department, were critically cross-examined by the 
counsel and representatives of the periodicals, and all the vari- 


VI 


OILS phases of the second-class postage problem were made the 
subject of a most painstaking investigation. 

The findings of the commission confirm the view that the cost 
of handling and transporting second-class mail matter is 
greatly in excess of the postage paid, and that an increase in 
the rate is not only justified by the facts, but is desirable. 

The commission reports that the evidence submitted for its 
consideration is sufficient to warrant a finding of the approxi¬ 
mate cost of handling and transporting the several classes of 
second-class mail known as paid-at-the-pound-rate, free-in- 
county, and transient matter, in so far as relates to the services 
of transportation, post-office cars, railway distribution, rural 
delivery, and certain other items of cost, but that it is without 
adequate data to determine the cost of the general post-office 
service and also what portion of the cost of certain other aggre¬ 
gate services is properly assignable to second-class mail matter. 
It finds that in the fiscal year 1908, the period for which the 
statistics for the Post Office Department were compiled, the cost 
of handling and transporting second-class mail, in the items of 
transportation, post-office cars, railway distribution, rural de¬ 
livery, and certain miscellaneous charges, was approximately 
6 cents a pound for paid-at-the-pound-rate matter, and for free- 
in-county and transient matter each approximately 5 cents a 
pound, and that upon this basis, as modified by subsequent re¬ 
ductions in the cost of railroad transportation, the cost of paid- 
at-the-pound-rate matter, for the services mentioned, is now 
approximately 5i cents a pound, while the cost of free-in-county 
and transient matter remains as formerly, namely, each at 
approximately 5 cents a pound. 

Since the commission has determined that the cost of han¬ 
dling and transporting secOnd-class mail is approximately 
cents for matter paid-at-the-pound-rate and approximately 5 
cents each for free-in-county and transient matter, without tak¬ 
ing into account the cost of the general post-office service and 
certain unassignable items of expense, it is apparent that the 
aggregate cost of all service performed by the postal establish¬ 
ment in connection with this class of mail matter is considerably 
above that amount. 


VII 


The postal service is now, for the first time in years, operated 
upon a self-sustaining basis, and in my judgment this is a wise 
policy; but it should not be carried out at the expense of cer¬ 
tain classes of mail matter that pay revenue largely in excess 
of their cost. It is not just that some classes of mail should be 
exorbitantly taxed to meet a deficiency caused by other classes, 
the revenue from which is much below their cost of handling 
and carriage. Where such inequalities exist they should be 
removed as early as practicable. The business enterprises of 
the publishers of periodicals, however, have been built up on 
the basis of the present second-class rate, and therefore it 
would be manifestly unfair to put into immediate effect a large 
increase in postage. That newspapers and magazines have 
been potent agencies for the dissemination of public intelli¬ 
gence and have consequently borne a worthy part in the devel¬ 
opment of the country all must admit; but it is likewise true 
that the original purpose of Congress in providing for them a 
subvention by way of nominal postal charges in consideration 
of their value as mediums of public information ought not to 
prevent an increase, because they are now not only educational 
but highly profitable. There is no warrant for the great dis¬ 
parity between existing postage rates on periodicals and the 
cost of the service the Government performs for them. The 
aggregate postal revenues for the fiscal year 1911 were S237,- 
879,823.60, derived mainly from the postage collected on the 
four classes of mail matter. It is carefully estimated by the 
Post Office Department that the revenue derived from mail 
matter of the first class is approximately one and one-half 
times the cost of handling and carriage; that the returns from 
third and fourth class matter are slightly in excess of their cost 
of handling and carriage; and that while second-class matter 
embraces over 65 per cent of the entire weight of all the mail 
carried, it, nevertheless, yields little more than 5 per cent of 
the postal revenues. 

The recommendations of the commission as to the postage 
rates on second-class mail are as follows: 

1. The rate of 2 cents a pound on copies mailed by publishers 
to subscribers, to news agents, and as sample copies, and by 
news agents to their subscribers or to other news agents. 


VIII 


2. The rate of 1 cent for each 4 ounces for copies mailed by 
other than publishers and news agents; that is, the present 
transient rate. 

3. The present free-in-county privilege retained, but not 
extended. 

The commission also recommended that the cent-a-copy rate 
for newspapers other than weeklies and for periodicals not 
exceeding 2 ounces in weight, and the 2-cent-a-copy rate for 
periodicals exceeding 2 ounces in weight, when mailed at a city 
letter-carrier office for local delivery, be abolished. 

As to the effect and adequacy of the proposed increase of 
1 cent a pound in postage the commission says: 

“ Such an increase will not, in the opinion of the commission, 
bring distress upon the publishers of newspapers and periodi¬ 
cals, or seriously interfere with the dissemination of useful 
news or information. A reasonable time should be allowed, 
after the rate is fixed, before it is put into effect. While the new 
rate will be very far from compensating the Government for 
the carriage and handling of second-class matter, it will to some 
extent relieve the existing burden and result in a more equitable 
adjustment of rates.” 

The commission suggests that the department “maintain an 
adequate cost system, so that the effect of the new rates may be 
closely observed and a proper basis may be secured for the con¬ 
sideration of any future proposals.” 

In these recommendations the Postmaster General and I 
heartily concur and commend them to the early attention of 
Congress. The proposed increase of 1 cent a pound in the 
second-class postage rate, I believe, to be most reasonable, and 
if sufficient time is allowed before the change goes into effect it 
should work little serious injury to the business of the periodical 
publishers, while equalizing, at least in a measure, the burdens 
of postal taxation. 

Wm. H. Taft. 

The White House, February 22, 1912, 


REPORT OF THE COMMISSION ON 
SECOND-CLASS MAIL MATTER. 


29552°—!^ 


-2 











CONTENTS 


Introductory— Page 

Notice of hearings—Appearances—Proceedings. 5 

Legislation as to postal rates on domestic matter. 8 

Act of March 3, 1879, and supplementary statutes. 11 

Existing rates on second-class matter. 13 

Increase in second-class matter. 13 

Comparative statement of annual receipts and expenditures of the Post 

Office Department—Deficits. 15 

Opinions of Postmasters General as to mail cost of second-class matter. 17 

Weighings of 1906 . 17 

^The Penrose-Overstreet Commission. 18 

Deport on business methods of Post Office Department. 19 

Weighings of 1907 . 20 

Department’s calculations of cost. 20 

Cost of transportation and handling second-class matter: 

Mail cost of second-class matter for fiscal year 1908. 21 

Total mail matter for 1908 . 23 

Apportionment of revenues. 26 

Classification of expenditures. 28 

Apportionment of expenses among classes and subclasses of mail.... 30 

Apportionment of cost of transportatioTi. 31 

Railroad transportation. 31 

Other transportation. 53 

Railway post-office car service. 57 

Apportionment of cost of handling the mails. 60 

Railway mail service. 61 

Rural delivery service. 65 

General post-office service. 67 

Miscellaneous items. 73 

Directly assignable... 73 

Not directly assignable. 76 

Summary of apportionment of cost for fiscal year 1908. 77 

General considerations of cost.- - 82 

Present mail cost of second-class matter. 84 

Findings as to cost. 89 

Rate that would compensate the Government. 90 

Competition of private agencies. 90 

Recommendations. 


3 







































‘ m v: - ■ 

vA.:'- 

_I » . ;•**, j\ *V' ■ ■ 

' ■' >'■ - 

?■ 

‘:- 



• *df- ',:i 


■ - ' 



T>:^ i)0 "' /' 




■■' " .k-;. rf-:‘* 


__ _ ...... ,.. -f^^^M^t-iA-.i*')*'* s'vt^’•v*''*;’,^ 's v;u;\ rf .' ./i- 

.>.ii'.;-'-,.k .. .;4;«‘-' ri«-'.>»i^^,.*«.'--'■■•••• i ■ ■< 

■ '»Wf»:>».--M;>« ■ :;•■ .V ■'■; '. >-T-i*.V, >,v I 

■ - , /.-i-' ’ V -7'/i U': 


-V , “• , ■• V '•» v'' 

'A' .. ^ 

iT','■ ■•f'lM'.v »v i..y .'iW %■.-IK- ’M 

^paC ^ : / V - 

|g:;:''"'tc.‘‘ '‘^r. ■;: 

. iff .*. 4., , , 

'K- • . t\-^^ ^ ^ 1 

&■■/; wv^<^>vS'-»7‘ ,.. ... . ‘:j;S^’ ' 

7.,,.^,r.,.>,:..... . ..... ".• il^-':tj>.tf.aBK7 

‘ ■ , ;^ , '.*" ■ v^>*t’•- '.*f-.;7vi ■ V.- *• 'r-v* i-*'- : 



.., . „ . - •t^r j,:.v>’!;'.-^ ..' ,j^„,;,H^!-. f. ..•.-•f.i ^ 

/.ti ~' - * ’ ' >* 4ta^uB !!^ldt9iiABB 




™ H-y'., ^ 

w.. . • - . 

«& 

' •^*»' ‘ * 


r\ 

1'*,>(» 




• 1/ '.1 ’ 




"■«%: 


. .. ■ u %yAS'-' '• 'c; »<*. 'f \">ll-^^i!W V'* ■ ^ ■' 

‘ ^Mtk ^> ■ ](■}■' " ’<*' ^,. v^'-^ ' "^ "'■ ■'! 

. .^'. '. nk-ri^’,^5^’..Vi"* 

^ >;c t.^ ^ 

; , W’ . ^ 

^ r ,.} x-t ^^■■' 

... ■'t* J' • 't'.i^) . 

,4 . ^•i.'kvA'v ' f-n,l .i;/ 


ft'.;‘,iB .V*., V -■• *»-••' . . ^“H> wHf"'"' ‘»ir<. .T»^' 


; >-' 




m:x ,. . ^v 




REPORT OF COMMISSION ON SECOND-CLASS MAIL 

MATTER. 


Washington, D. C., Februm^ 1912. 

To the President: 

The Commission on Second-Class Mail Matter, appointed pursuant 
to joint resolution of Congress approved March 4, 1911, has the 
honor to submit the following report: 

The resolution directed the Commission “ to examine the reports 
of the Post Office Department and any of its officers, agents or 
employees, and the existing evidence taken in respect to the cost 
to the Government of the transportation and handling of all classes 
of second-class mail matter which may be submitted to them, and 
such evidence as may be presented to them by persons having an 
interest in the rates to be fixed for second class mail matter, to make 
a finding of what the cost of transporting and handling different 
classes of such second class mail matter is to the Government and 
what in their judgment should be the rate for the different classes 
of second class postal matter, in order to meet and reimburse the 
Government for the expense to which it is put in the transporta¬ 
tion and handling of such matter.” 

Upon its appointment and organization, the Commission issued an 
announcement, under date of June 17, 1911, that it would begin its 
public sessions in the city of New York on July 18, 1911, and that 
all persons and organizations desiring to appear were requested to 
file notices of their appearance on or before July 11, 1911, with a 
statement of the particular matters as to which they wished to be 
heard or to present evidence. This announcement was distributed 
widely through the service of the press associations, and in addition 
about 3,000 copies were mailed to the publishers of newspapers and 
periodicals, and to various organizations representing those inter¬ 
ested in the inquiry, as well as to all who had appeared before 
the Joint Commission of Congress on Second-Class Matter in 1906, 
or at the hearings on second-class mail before the Committee on the 
Post Office and Post Koads of the House of Eepresentatives in 1910. 

At the request of the Postmaster General, the Commission ad¬ 
journed its hearings until August 1, 1911. They were then begun 
and were continued on August 2, 3, 4, 8, 9, 10, 11, 15, 23, 24, and 25 

5 



6 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


at the city of New York, and on September 29 and 30 at Wash¬ 
ington, D. C. 

The following persons appeared and were heard orally: 

Hon. Frank H. Hitchcock, Postmaster General. 

Hon. Joseph Stewart, Second Assistant Postmaster General. 

Hon. James J. Britt, Third Assistant Postmaster General. 

Mr. Herbert Noble and Mr. James B. Sheehan for the Review of Reviews, 
Everybody’s Magazine, Adventure, McClure’s Magazine, the American Magazine, 
Literary Digest, Saturday Evening Post, Ladies’ Home Journal, The Country 
Gentleman, The Delineator, The Designer, New Idea Woman’s Magazine, Wo¬ 
man’s Home Companion, and Farm and Fireside. 

Mr. Frank Hendrick for the Trend and Le Bon Ton. 

Hon. W. S. Shallenberger and A. J. Rowland, D. D., for the Interdenomina¬ 
tional Sunday School Council. 

Mr. Edwin R. Graham for the Methodist Book Concern. 

Mr. Gilbert Howell for the National Fraternal Congress and the National 
Fraternal Press Association. 

Mr. Charles T. Root for The Federation of Trade Press Associations in the 
United States. 

Mr. Wilmer Atkinson for the Farm Journal, of Philadelphia. 

Prof. George W. Kirchwey for numerous learned societies; Prof. F. R. Hutton 
for the American Society of Mechanical Engineers; Mr. Charles L. Parsons for 
the American Chemical Society; Mr. Ralph W. Pope for the American Institute 
of Electrical Engineers; Prof. Cottell for the American Association for the Ad¬ 
vancement of Science; and Capt. Joseph F. Siler for the Association of Mili¬ 
tary Surgeons and American Red Cross. 

Mr. Samuel Gompers, Mr. Matthew Woll and Mr. W. J. Adames for the 
publications of international trades unions and fraternal societies; Mr. Herman 

E. Wills for the Brotherhood of Locomotive Engineers, the Order of Railway 
Conductors of America, the Brotherhood of Railway Trainmen, and the 
Brotherhood of Locomotive Firemen and Enginemen; Mr. Bernard Nolan for 
the mechanical trades of the printing trade, the Mechanical Trade Conference 
and the Printing Trade Industry of Greater New York; Mr. Peter J. Brady 
for the Allied Printing Trades Council of Greater New York. 

Mr. James L. Cowles and Mr. Frederick C. Beach for the Postal Progress 
League. 

Mr. Herbert H. White for the University Press, of Cambridge, Mass. 

Mrs. Mary Ware Dennett for the National Woman’s Suffrage Association ; 
and Mrs. Leonora O’Reilly for the Woman’s Trades Union League. 

Written statements and arguments were also received from several 
of those above named and in addition from the following persons: 

Mr. Frank J. Loesch for the scientific and professional societies publishing 
journals; Mr. Everett Sisson for the Religious Weekly Publishers’ Association; 
Dr. William C. Woodward for the American Public Health Association; Mr. 
W. R. Boyd for the Iowa State Board of Education; Miss Mabel T. Boardman 
for the American Red Cross; Mr. Ellery Sedgwick for the Atlantic Monthly; 
Mr. A. R. Talbot, Mr. E. W. Donovan, Mr. W. A. Frazier, and Mr. H. C. Evans 
for the Associated Fraternities of America; Mr. B. H. Bainbridge for the 
Postal Committee of the Manufacturers’ Association of New York; Mr. Charles 

F. Rideal for the Banker and Investor Magazine; Dr. E. Elmer Keeler for The 
Good Health Clinic; Mr. Clyde C. Buckingham for the Texas Realty Journal; 
Mr. J. W. Ball for Green’s Fruit Grower; Mr. Grant Hultberg for Augustana 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 7 

Book Concern; Rev. Rufus W. Miller, D. D., for the Sunday School Board of 
the Reformed Church; Mr. G. C. Osborne for The Journal and Messenger; Mr. 
B. Kirk Rankin for the Southern Agriculturist; Mr. John H. Cowles for the 
Masonic Home Journal; Rev. Wilbur F. Crafts for the International Reform 
Bureau; Mr. F. Colburn Pinkham for the National Retail Dry Goods Association. 

Messrs. John F. Oltrogge, General Superintendent P. F. Collier & Son; Simon 
Brentano; R. R. Bowker; Charles William Burrows; Jacob Rubel; Philip Gott- 
helf, publisher of Elite Styles; W. L. Dudley; F. E. Williams; T. M. Filbert, 
publisher of the Des Lacs Observer; E. A. Hempstead; J. L. Sutton; Motor 
Car Publishing Co.; W. F. Wendt Publishing Co.; M. T. Richardson Co., 
publishers of Blacksmith and Wheelwright; La Hacienda Co.; and the American 
Blacksmith Co. 

At the beginning of the hearings the Postmaster General addressed 
the Commission, stating in a summary way the present attitude of the 
department and his recommendations. The Second Assistant Post¬ 
master General then submitted to the Commission the results of the 
inquiries of the department as to the cost of transporting and han¬ 
dling second-class mail matter, with a large number of tables pur¬ 
porting to show in detail the items of cost and their apportionment 
in the different branches of the service; and the Third Assistant 
Postmaster General made a statement with respect to the need of a 
“ simple, connected, and self-construing statute ” covering the subject 
of second-class mail, in order to obviate the difficulties now arising 
in administration. 

The extent and character of the investigations conducted by the 
Post Office Department in the matter of cost were fully detailed and 
considered, and opportunity was afforded to counsel for publishers 
for the examination of the files of the department and for the interro¬ 
gation of those who were able to give information as to the method 
and results of its computations. 

Mr. Herbert Noble and Mr. James B. Sheehan, on behalf of their 
clients, conducted before the Commission an extended and careful 
cross-examination of officers and employees of the department. There 
were examined: 

Hon. Joseph Stewart, Second Assistant Postmaster General; 

Hon. James J. Britt, Third Assistant Postmaster General; 

Mr. Charles H. McBride, superintendent of the Railway Adjustment Division; 

Mr. John N. Masten, assistant superintendent of the Railway Mail Service; 

Mr. Charles H. Fullaway, assistant superintendent of the Division of 
Finance; and 

Mr. W. H. Haycock, superintendent of the delivery division of the post office 
at Washington, D. C. 

They also called and examined the following persons: 

Mr. Solomon G. Rosenbaum, president of the National Cloak & Suit Co.; Mr. 
Edmund Carrington, of the Butterick Co.; Mr. Valentine Beck, of the Review 
of Reviews; Mr. R. S. W. Paine, of McClure’s Magazine; and Mr. P. C. Wiegand, 
certified public accountant. 


8 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

The Commission were thus aided in their work by a painstaking 
analysis of the calculations of the department, both with respect to 
their accuracy and the adequacy of the inquiries upon which they 
were based, as well as by a discussion of the general considerations 
which are involved in fixing rates so closely related to important edu¬ 
cational agencies and the suitable dissemination of current informa¬ 
tion. 

Various new or revised calculations were submitted from time to 
time and the inquiry has been unavoidably prolonged, making im¬ 
possible an earlier report. 

PREFATORY HISTORICAL REVIEW. 

Before examining the data adduced before the Commission it may 
be of advantage to advert briefly to the more important legislation on 
the subject of postal rates and to the events leading to the appoint¬ 
ment of the Commission. 

LEGISLATION AS TO POSTAL RATES ON DOMESTIC 

MATTER. 

Without attempting to state comprehensively all the various rates 
on domestic mail matter established from time to time, the following, 
for purposes of comparison, may be noted: 

letters.—^Under the first statute passed after the adoption of the 
Constitution (act of Feb. 20, 1792^) the rates for single letters (that 
is, composed of a single sheet) were fixed according to distance, rang¬ 
ing from 6 cents for not exceeding 30 miles to 25 cents for over 450 
miles, with double and triple rates for double and triple letters. 
These rates were not greatly altered, for any long period of time, 
until 1845. In that year^ the rate for single letters (defined as 
weighing not more than one-half ounce) for a distance under 300 
miles was made 5 cents, otherwise 10 cents. In 1851,^ it was reduced 
to 3 cents for any distance not more than 3,000 miles, if prepaid, and 
5 cents if not prepaid, with double rates for any greater distance. In 
1855,^ prepayment was made compulsory and the rate for more than 
3,000 miles was increased to 10 cents. In 1863,® a uniform rate of 
postage on letters was established, regardless of distance, at 3 cents 
for a weight not exceeding one-half ounce; and this rate was con¬ 
tinued by the general act of 1879.® In 1883,^ it was reduced to 2 
cents a half ounce, and in 1885 ® to 2 cents for each ounce or fraction 
thereof. 

Newspapers, periodicals, etc. (1792-1846).—By the act of 1792,® the 
postal rates for newspapers were 1 cent each for not more than 100 


11 Stat., 235. 

25 Stat., 733. 

8 0 stat., 587. • 


*10 Stat, 641. 

8 12 Stat, 705. 

«20 Stat, 355, 358. 


’22 Stat, 455. 
8 23 Stat, 387. 
»1 Stat, 238. 



REPORT OP COMMISSION ON SECOND-CLASS MATTER. 


9 


miles and cents for greater distances. In 1794, there was added 
the proviso that the rate for single newspapers within the same State 
should not exceed 1 cent, and further, “ that where the mode of con¬ 
veyance, and the size of the mails will admit of it, magazines and 
pamphlets may be transported in the mail, at one cent per sheet, for 
conveyance, any distance not exceeding fifty miles, one and a half 
cents for any distance over fifty miles and not exceeding one hun¬ 
dred, and two cents per sheet for any greater distance.” ^ In 1825,^ 
while the rate for newspapers was continued that for magazines 
and pamphlets published periodically and mailed to subscribers was 
fixed at cents a sheet for any distance not more than 100 miles 
and 24 cents for greater distances, and 4 and 6 cents, respectively, 
where they were not published periodically; and, in 1827,® there was 
a supplementary provision that where the magazine or pamphlet 
contained more than 24 pages on a royal sheet, or one of less size, the 
charge should be by the sheet, with one-half the rate for small 
pamphlets printed on a half or quarter sheet. 

(1845-1879.)—This continued until 1845. Between that year and 
1879 there were numerous changes, involving many details, and we 
mention only some of the illustrative features of the legislation of 
that period. 

The free privilege for newspapers was introduced in 1845.^ It 
applied to those not more than 1,900 square inches in size, distrib¬ 
uted within 30 miles of the place of printing. This was withdrawn 
by the act of 1847,® which, however, allowed free exchanges between 
publishers. In 1851,® weekly newspapers, not over 3 ounces in 
weight, sent to bona fide subscribers were made free of postage 
within the county where published. This was restricted in 1852^ 
to one copy to each subscriber, and in 1868.® it was provided' that 
these copies should be deposited in the office nearest the place of pub¬ 
lication and that there should be no distribution by carriers save on 
payment of postage. In 1874,® the free-in-county privilege was ex¬ 
tended to all newspapers save that, unless postage paid, they were 
not to be delivered at letter-carrier offices or distributed by carriers. 
In 1879,^® with the same restriction, this privilege was given to all 
second-class publications as there defined. 

Keturning to newspapers and periodicals, other than those made 
free, the act of 1845 continued the rates of 1825 for newspapers not 
more than 1,900 square inches. For those of larger size, the same 
rate was fixed as on magazines and pamphlets, and the latter were 
charged 2J cents a copy weighing not more than an ounce and 1 
cent more for each additional ounce, or fraction in excess of one- 

11 Stat., 362. » 9 Stat, 202. «15 Stat, 194, 195. 

2 4 Stat., 111. « 9 Stat., 588. ® 18 Stat, 232, 233. 

34 Stat, 238. "^lO Stat, 38, 39. 20 Stat 358, 361- 

*5 Stat, 733. 




10 


REPORT OP COMMISSION ON SECOND-CLASS MATTER. 


half ounce. Passing the provisions of the act of 1851, which 
were in force for little more than a year, we come to that of 
1852, which made the rate for newspapers, periodicals and other 
printed matter, weighing not over 3 ounces, 1 cent to any part of 
the United States and 1 cent additional for each additional ounce 
or fraction thereof, with one-half this rate for those not over 1^ 
ounces circulated in the State where published. Small newspapers 
and periodicals published monthly or oftener, and pamphlets con¬ 
taining not more than 16 octavo pages each, when sent in single 
packages of at least 8 ounces to one address, were charged one-half 
cent per ounce, or fraction thereof. 

In 1863,^ mailable matter was divided into three classes: (1) Let¬ 
ters, (2) regular printed matter, (3) certain miscellaneous matter. 
The second class embraced all mailable matter exclusively in print, 
issued at stated periods. When issued weekly or oftener, not over 4 
ounces in weight, and sent to regular subscribers, quarterly postage 
was charged running from 5 cents a quarter for weeklies to 35 cents 
for those issued seven times a week. For each additional 4 ounces 
or fraction thereof, there was an additional rate. When issued less 
frequently than weekly, the rate was 1 cent a copy, not over 4 
ounces; and small newspapers in packages to one address were 
charged the same rate per package. Transient second-class matter 
and third-class matter (except circulars and books) were charged 2 
cents for each 4 ounces or fraction thereof in one package to one ad¬ 
dress ; books, double; and unsealed circulars, 2 cents for three or less 
in number and proportionately for more. 

In 1872,2 the quarterly rates on newspapers and periodicals were 
modified. And in that year there was provided a local-delivery rate 
of 1 cent each for newspapers (except weeklies), periodicals and 
circulars, not over 2 ounces in weight, and 2 cents for periodicals over 
2 ounces when deposited in a letter-carrier office for delivery by the 
office or its carriers. By this statute, third-class matter was made to 
include samples of merchandise not over 12 ounces, and all other 
articles not exceeding 4 pounds, which were not liable to injure the 
mails; and the third-class rate was 1 cent for each 2 ounces or frac¬ 
tion thereof; books, samples of metals, ores, minerals and merchan¬ 
dise had double rates. 

In 1874,^ there was introduced a pound rate for newspapers and 
periodicals mailed from a known office of publication, or news agency 
to regular subscribers or news agents (save in case the local-delivery 
rate was payable under the act of 1872). This was fixed at 2 cents a 
pound or fraction thereof for those issued weekly or more frequently; 
otherwise 3 cents. And the rate for all third-class matter was made 
1 cent for each 2 ounces or fraction thereof. 


I 


i]2 Stat., 705. 


2 17 Stat, 296. 


*18 Stat, 232. 




REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


11 


The act of 1876,^ put “ regular publications designed primarily for 
advertising purposes,” or for circulation free or at nominal rates, 
under the third-class rate. 

Act of March 3, 1879. 

The present law classifying mail matter was enacted in 1879.^ 
This established four classes: First, written matter; second, period¬ 
ical publications; third, miscellaneous printed matter; and fourth, 
merchandise. 

Mailable matter of the second class was defined as embracing all 
newspapers and other periodical publications which are issued at 
stated intervals and as frequently as four times a year, under specified 
conditions, as follows: ^ 

First. It must regularly be issued at stated intervals, as frequently as four 
times a year, and bear a date of issue, and be numbered consecutively. 

Second. It must be issued from a known office of publication. 

Third. It must be formed of printed paper sheets, without board, cloth, 
leather, or other substantial binding, such as distinguish printed books for 
preservation from periodical publications. 

Fourth. It must be originated and published for the dissemination of informa¬ 
tion of a public character, or devoted to literature, the sciences, arts, or some 
special industry, and having a legitimate list of subscribers; Provided, however, 
That nothing herein contained shall be so construed as to admit to the second 
class rate regular publications designed primarily for advertising purposes, or 
for free circulation, or for circulation at nominal rates. 

The provisions as to rates on second-class matter were: 

Sec. 11. Publications of the second class except as provided in section twenty- 
five, when sent by the publisher thereof, and from the office of publication, in¬ 
cluding sample copies, or when sent from a news agency to actual subscribers 
thereto, or to other news agents, shall be entitled to transmission through the 
mails at two cents a pound or fraction thereof, such postage to be prepaid, as 
now provided by law. 

Sec. 25. That publications of the second class, one copy to each actual sub¬ 
scriber residing in the county where the same are printed, in whole or in part, 
and published, shall go free through the mails; but the same shall not be deliv¬ 
ered at letter-carrier offices, or distributed by carriers, unless postage is paid 
thereon at the rate prescribed in section thirteen (sic) of this act: Provided, 
That the rate of postage on newspapers, excepting weeklies, and periodicals not 
exceeding two ounces in weight, when the same are deposited in a letter-carrier 
office for delivery by its carriers, shall be uniform at one cent each; periodicals 
weighing more than two ounces shall be subject, when delivered by such car¬ 
riers, to a postage of two cents each, and these rates shall be prepaid by stamps 
affixed. 

Provision was made that foreign newspapers and other periodicals 
of the same general character as those admitted to the second class 


119 stat., 82. 

2 20 stat., 358, act of Mar. 3, 1879, chap. 180, secs. 7 et seq. 

3 Id., 359, sec. 14. 



12 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


in the United States might, under the direction of the Postmaster 
General, be transmitted through the mails at the same rates as if 
published here.^ Further, all publishers of second-class matter were 
allowed, without paying extra postage, to fold within their regular 
issues a supplement, provided the added matter was germane,^ that 
is, supplied for sake of completeness. 

Third-class matter® embraced books, transient newspapers, and 
periodicals, circulars and other matter wholly in print, proof sheets, 
corrected proof sheets, together with manuscript copy, and these 
were charged 1 cent for each 2 ounces or fraction thereof. 

Fourth-class matter ^ consisted of that which was not included in 
the other classes, not in form or nature liable to injure the contents 
of the mail bag or harm those engaged in the postal service, and not 
exceeding 4 pounds in weight for each package (except in case of 
single books), and the rate was fixed at 1 cent an ounce or fraction 
thereof. 

Act of June 9, 1884. 

By the act of June 9, 1884,® the transient rate on newspapers and 
periodical publications of the second class, that is, when sent by 
others than the publisher or news agent, was made 1 cent for each 
4 ounces or fraction thereof. 


Act of March 3, 1885. 


In 1885,® the pound 
1 cent a pound. 


rate for second-class matter was reduced to 
Later Statutes. 


In 1894,^ the definition of publications entitled to be admitted to 
the mails as second-class matter was enlarged by the following pro¬ 
vision with respect to those issued by benevolent or fraternal societies, 
trade unions, and learned associations: 

All periodical publications issued from a known place of publication at stated 
intervals and as frequently as four times a year by or under the auspices of a 
benevolent or fraternal society or order organized under the lodge system and 
having a bona fide membership of not less than one thousand persons or by a 
regularly incorporated institution of learning or by or under the auspices of 
a trades union and all publications of strictly professional, literary, historical, 
or scientific societies including the bulletins issued by State boards of health 
shall be admitted to the mails as second class matter and the postage thereon 
shall be the same as on other second class matter and no more: Provided, fur¬ 
ther, That such matter shall be originated and published to further the objects 
and purposes of such society, order, trades union, or institution of learning and 
shall be formed of printed paper sheets without board, cloth, leather or other 
substantial binding such as distinguish printed books for preservation from 
periodical publications. 


1 20 Stat., 359, sec. 15, 

2 Id., 359, sec. 16. 
s Id., 359, sec. 17. 

< Id., 360, sec. 20. 


8 23 Stat., 40. 

«23 Stat, 387. 

7 28 Stat, 105, act of .July 16, 1894, 
chap. 137. 





REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


13 


Under this amendment, we are advised that the department has 
uniformly held that publications containing advertisements in the 
interest of other persons or concerns than the society or trades union 
or institution of learning which the paper represents are not entitled 
to these privileges; and that to justify such advertisements, there 
must be compliance with the conditions of the act of March 3, 1879. 

There was a further supplementary act in 1900^, with respect to 
the publications of State departments of agriculture, as follows: 

All periodical publications issued from a known place of publication at stated 
intervals as frequently as four times a year by State departments of agricul¬ 
ture shall be admitted to the mails as second class mail matter: Provided, That 
such matter shall be published only for the purpose of furthering the objects of 
such departments: And provided further, That such publications shall not 
contain any advertising matter of any kind. 

In 1910,^ it was provided that where publications mailed at the 
pound rate or free in county are undeliverable, they shall be return¬ 
able to the publisher, after specified notice and in the circumstances 
stated, charged with postage at the third-class rate. 

Existing Rates on Second-Class Maiter. 

The existing rates on second-class matter are those established by 
the act of 1879, as amended in 1884 and 1885. There are, in the 
words of the Postmaster General, “seven rates, or variations of 
rates, applicable to different circumstances,” as follows: 

(1) The general rate of 1 cent a pound on copies mailed by publishers to sub¬ 
scribers, to news agents, and as sample copies. 

(2) The free-of-postage rate on copies mailed to subscribers residing In the 
county where the publications are printed and published, when not addressed 
for delivery at a city letter-carrier office. 

(3) The cent-a-pound rate on copies mailed for delivery by rural carriers 
when emanating from a city letter-carrier office. 

(4) The cent-a-pound rate on weekly publications mailed for delivery at a 
city letter-carrier office. 

(5) The cent-a-copy rate for newspapers, other than weeklies, and for periodi¬ 
cals not exceeding 2 ounces in weight, when deposited at a city letter-carrier 
office for local delivery by carriers. 

(6) The rate of 2 cents a copy for periodicals exceeding 2 ounces in weight 
when deposited at a city letter-carrier office for local delivery by carriers. 

(7) The rate of 1 cent for each 4 ounces for copies mailed by others than 
publishers or news agents. 

INCREASE IN SECOND-CLASS MATTER. 

Under these rates the amount of second-class matter transmitted 
through the mails has increased enormously. The report of the 

1 31 Stat., 660, act of June 6, 1900, chap. 801. 

2 36 Stat., 366, act of May 12, 1910, chap. 230. 




14 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


Post Office Department for the year 1908 shows the following in¬ 
creases by weight for three decades: 

Pounds. 


1879 to 1888, inclusive_ 969, 111, 148 

1889 to 1898, inclusive_ 2,474,430,120 

1899 to 1908, inclusive_ 5, 377, 606, 403 

Total for 30 years_^8,821,147,671 


The statement by years from 1879 to 1910, showing the weight of 
second-class matter, including free in county (from 1901 and that 
paid at the pound rate, according to the statement filed by the de¬ 
partment with the Commission, is as follows: ^ 


“ TaT)le showing hy years, and in pounds, the total weight of mailings of matter 
of the second class, free-in-county; as to subscribers subject to postage at the 
pound 7'ate; total mailings, and the total postage collected, with the yearly 
percentage of increase or decrease, covering the period of the fiscal years fro7n 
1879 to 1910, both years included. 


1879 

1880 
1881 
1882 

1883 

1884 

1885 

1886 

1887 

1888 

1889 

1890 

1891 

1892 

1893 
1894. 

1895 

1896 

1897 

1898 
1899, 
1900 
1901, 
1902 

1903, 

1904, 
1905 

1906, 

1907, 

1908, 

1909, 

1910, 


Year. 


Free in Percent 
county. ' increase. 



2 28,523,846 
2 30,714,135 
2 34,754,486 
2 39,289,834 
2 45,111,920 
2 44,962,995 
2 46,820,185 
2 52,348,297 
2 54,822,027 
2 59,316.412 
2 62,241^746 
2 67,506,882 
31,775,264 
34,094,544 
36,305,884 
40,429,254 
44,442,374 
47,839,783 
52,460,251 
151,701,277 
1 51,568,188 
55,639,177 


7.29 
6.48 
11.35 
9.92 

7.64 

9.65 
1 1.45 

1.25 

7.31 


Paid matter. 

Per cent 
increase. 

Total mail¬ 
ings. 

Per cent 
increase. 

51,125,500 


51,125,500 


61,322,629 

19.94 

61,322,629 

19.94 

69,952,432 

14.07 

69,952,432 

14.07 

78,255,164 

11.86 

78,255,164 

11.86 

85,258,876 

8.94 

85,258,876 

8.94 

94,479,607 

10.81 

94,479,607 

10.81 

101,057,963 

6.96 

101,057,963 

6.96 

109,962,589 

8.81 

109,962,589 

8.81 

126,234,883 

14. 79 

126,234,883 

14. 79 

143,662,918 

13.80 

143,662,918 

13.80 

161,635,127 

12.51 

190,158,973 

32.36 

174,046,764 

7.67 

204,760,899 

7.67 

196,942,092 

13.15 

231,696,578 

13.15 

222,642,392 

13.05 

261,932,226 

13.05 

255,634,213 

14.81 

300,746,133 

14.81 

1254,790,306 

> .33 

1299,753,301 

1 .33 

265,314,382 

4.13 

312,134,567 

4.13 

296,640,351 

11.81 

348,988,648 

11.81 

310,658,155 

4.73 

365,480,182 

4.73 

336,126,338 

8.20 

395,442,750 

8.20 

352,703,226 

4.93 

414,944,972 

4.93 

382,538,999 

8.45 

450,045,881 

8.45 

429,444,573 

12.26 

461,219,837 

2.48 

454,152,359 

5.75 

488,246,903 

5.86 

509,537,962 

12.19 

545,843,846 

11.79 

569,719,819 

11.81 

610,149,073 

11.78 

618,664,754 

8.59 

663,107,128 

8.08 

660,338,840 

6.73 

708,178,623 

6.79 

712,945,176 

7.96 

765,405,427 

8.08 

» 694,86.5,884 

»2.53 

1 746,567,161 

1 2.46 

723,233,182 

4.08 

774,801,370 

3.78 

817,772,900 

13.07 

873,412,077 

12.72 


Total post¬ 
age. 


81,104,184.67 

1.226.452.58 
1,399,048.64 
1,565,103.28 

1.705.177.53 

I, 8.89,592. 14 
2,021,159.26 

II, 099,625.89 
1,262,348.83 

1.436.629.18 
1,616,351.27 
1,740,467.64 

1.969.420.92 

2.226.423.92 
2,556,342.13 
12,547,903.06 

2.653.143.82 
2,966,403.51 
3,106,581.55 
3,361,263.38 
3,527,032.26 
3,825,389.99 
4,294,445.73 

4.541.523.59 
5,095,379.62 

5.697.198.19 

6.186.647.54 
6,603,388.40 
7,129,451.76 
16,948,658.84 

7.232.331.82 
8,177,729.00” 


1 Decrease. 2 Estimated. 

It should be noted that the amount of second-class matter paid at 

the pound rate in 1910 was greater by 94,539,718 pounds than that in 

1909 and by 122,907,016 pounds than that in 1908.^ 

____ * 

1 Annual Report, 1908, p. 284. In the Report of the Third Assistant Postmaster Gen¬ 
eral for 1911, p. 36, the figures are given for the past 30 years, from 1882 to 1911, show¬ 
ing a total of 12,102,930,224 pounds of second-class matter, of which there were 7,126,- 
713,277 pounds in the last 10 years. 

2 Prior to 1901, the amount of free-in-county matter was based on an estimate that it 
constituted 15 per cent of all second-class matter. This can not be taken to he accurate, 
the estimate for 1900, for example, being 67,506,882, largely in excess of the amount for 
any later year. Since 1901, the actual amounts have been returned. (Annual Report, 
1901, p. 772; Annual Report, 1902, pp. 482, 483.) 

3 Exhibit 105. 

< The total pound-rate matter for the fiscal year 1911 was 893,296,908 pounds, and the 
free-In-county matter 57,704,761 pounds. Report of Third Assistant Postmaster General 
1911, p. 36. 











































































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 15 

COMPAKATIVE STATEMENT OF ANNUAL RECEIPTS 
AND EXPENDITURES—DEFICITS. 

The report of the receipts and expenditures of the Post Office De¬ 
partment shows a wide range of fluctuation. In 1800 ^ the receipts 
exceeded expenses by $66,810; in 1837 ^ by $1,657,349; in 1842 there 
was a deficit of $1,127,902. A surplus was shown in 1848, but in 
1852 there was an excess of expenditures amounting to $1,923,923. 
This increased to $10,652,542 in 1860. The deficit was largely re¬ 
duced in the succeeding years and in 1865 there was a surplus of 
$851,430. From that time, the receipts and expenditures, together 
with the number of post offices, are thus shown in the department’s 
table: ^ 


Fiscal year. 

Estimated 

population. 

Number 

o^ost 

offices. 

Audited reve¬ 
nues. 

Revenue 

per 

capita. 

Audited 

expenditures. 

Expendi¬ 

tures 

per 

capita. 

Excess of 
expenditures 
over revenues. 

1865. 

34,748,000 
35,469,000 
36,211,000 
36,973,000 
37,756,000 
38,558,371 
39,555,000 
40,596,000 
41,677,000 
42,796,000 
43,951,000 
45,137,000 
46,353,000 
47,598,000 
48,866,000 
50,155,783 
51,316,000 
52,495,000 
53,693,000 
54,911,000 
56,148,000 
57,404,000 
58,680,000 

20,550 
23,828 
25,163 
26,481 
27,106 
28,492 
30,045 
31,863 
33,244 
34,294 
35,547 
36,383 
37,345 
38,253 
40,588 
42,989 
44,512 
46,231 
46,820 
48,434 
51,252 
53,614 
55,157 
57,376 
58,999 

$14,556,158.70 
14,436,986. 21 
15,297,026.87 

16.292.600.80 

18.344.510.72 
19,772,220.65 
20,037,045.42 
21,915,426.37 
22,996,741.57 
26,471,071.82 
26,791,360.59 
28,644,197.50 
27,531,685.26 

29.277.516.95 
30,041,982.86 
33,315,479.34 

36.785.397.97 

41.876.410.15 
45,508,692.61 

43.325.958.81 
42,660,843.83 

43.948.422.95 
48,837,609.39 
.52,695,176.79 
56,175,611.18 
60,882,097.92 

65.931.785.72 

70.930.475.98 

75.896.993.16 
75,080,479.04 

$0.42 

$13,694,728.28 
15,352,079.30 
19,235,483.46 
22,730,592.65 
23,698,131.50 
23,998,837.63 
24,390,104.08 
26,658,192.31 
29,084,945. 67 

32.126.414.58 

33.611.309.45 

33.263.487.58 
33,486,322. 44 
34,165,084.49 

33.449.899.45 
36,542,803.68 
39,592,566.22 
40,482,021.23 
43,282,944.43 
47,224,560.27 
50,046,235.21 
51,004,743.80 
53,006,194.39 
56,468,315.20 
62,317,119.36 

$0.39 

.43 

8 $861,430.42 
915,093.09 

3.938.456.59 

6.437.991.85 
5,353,620.78 
4,226,616.98 
4,353,058.66 
4,742,765.94 
6,088,204.10 
5,655,342.76 

6.819.948.86 
4,619,290.08 

5.954.737.18 
4,887,567.54 

3.407.916.59 
3,227,324.34 
2,807,168.25 

8 1,394,388.92 
8 2,225,748.18 
3,898,601.46 
7,485,391.38 
7,056,320.85 
4,168,585.00 
3,773,138.41 

6.141.508.18 

1866. 

.41 

1867. 

.42 

.53 

1868. 

.44 

.61 

1869. 

.49 

.63 

1870. 

.51 

.62 

1871. 

.51 

.62 

1872. 

.54 

.66 

1873. 

.55 

.70 

1874. 

.62 

.75 

1875. 

.61 

.76 

1876. 

.63 

.74 

1877. 

.59 

.72 

1878. 

.62 

.72 

1879. 

.62 

.68 

1880. 

.66 

.73 

1881. 

.72 

.77 

1882. 

.80 

.77 

1883. 

.85 

.81 

1884. 

.79 

.86 

1885. 

.76 

.89 

1886. 

.77 

.89 

1887. 

.83 

.90 

1888. 

59,974,000 
61,289,000 
62,622,250 
63,947,000 
65,191,000 
66,456,000 
67,740,000 
69,043,000 
70,365,000 
71,704,000 
73,060,000 
74,433,000 
76,295,220 
77,754,000 
79,117,000 
80,847,000 
81,867,000 
83,260,000 
84,662,000 
86,074,000 
87,496,000 
88,926,000 
90,363,000 

.88 

94 

1889. 

.92 

1.02 

1890. 

62,401 
64,329 
67,119 
68,403 
69,805 
70,064 
70,360 
71,022 
73,570 
75,000 

.97 

66,259,547.84 

1.06 

5,377,449.92 

1891. 

1.03 

73,059,519.49 

1.14 

7,127,733.77 

1892. 

1.09 

76,980,846.16 

1.18 

6,050,370.18 

1893 . 

1894 . 

1.14 

1.11 

81,581,681.33 
84,994, 111 62 

1.23 

1.25 

5,684,688.17 
9,913,632.58 

1895. 

76,983,128.19 

1.12 

87,179,551.28 

1.26 

10,196,423.09 

1896. 

82,499,208.40 

1.17 

90,932,669.50 

1.29 

8,433,461.10 

1897. 

82,665,462.73 

1.15 

94,077,242.38 

1.31 

11,411,779.65 

1898. 

89,012,618.55 

1.22 

98,033,523.61 

1.34 

9,020,905.06 

1899. 

95,021,384.17 

1.28 

101,632,160.92 

1.37 

6,610,776.75 

1900. 

76,688 
76,945 
75,924 
74,169 

102,354,579.29 

1.34 

107,740,267.99 

1.41 

5,385,688.70 

1901. 

111,631,193.39 

1.43 

115,554,920.87 

1.49 

3,923,727.48 

1902. 

121,848.047.26 

1.54 

124,785,697.07 

1.58 

2,937,649.81 

1903. 

134,224,443.24 

1.66 

138,784,487.97 

1.72 

4,560,044.73 

1904. 

71,131 

143,582,624.34 

1.75 

152,362,116.70 

1.86 

8,779.492.36 

1905. 

68,131 

152,826,585.10 

1.84 

167,399,169.23 

2.01 

14,572,584.13 

1906. 

65,600 

167.932,782.95 

1.98 

178,449,778.89 

2.11 

10,516,995.94 

1907. 

62.658 

183,585,005.57 

2.13 

190,238,288.34 

2.21 

6,653,282.77 

1908. 

61,158 

191,478,663.41 

2.19 

208.351,886.15 

2.36 

16,873,222.74 

1909. 

60,144 

203, .562,383.07 

2.29 

221,004,102.89 
229,977,224.50 

2.49 

17,441,719.82 

1910. 

59,580 

224,128,657.62 

2.48 

2.54 

5,848,566.88 






1 Annual Report, 1910, p. 43. ^ Excess of revenues over expenditures. 

2 Id., p. 365. 

























































16 EEPOliT OF COMMISSION ON SECOND-CLASS MATTEL. 

So many factors are involved that mistaken inferences may easily 
be drawn from these figures, and various arguments have been based 
upon them. But it may be observed that neither the reductions in 
the paid-at-the-pound rate of 1874, 1879 and 1885, nor the increase 
in tonnage of paid-at-the-pound-rate matter during the same period— 
nor 3 ^et the very large increase of 1910—can be shown to have ex¬ 
ercised a controlling influence upon the department’s deficit. In 
the fiscal year 1874, immediately before the rate of 2 and 3 cents 
a pound for second-class matter (mailed to subscribers and news 
agents) went into effect, the deficit was $5,655,342. In 1879, the 
year before the rate was fixed at 2 cents a pound for newspapers and 
periodicals alike, it had fallen to $3,407,916, and this was subse¬ 
quently decreased. In 1882 and 1883, there was a surplus, amounting 
in the latter year to $2,225,748. But this speedily gave way to a 
deficit which in the year 1885, immediately before the reduction of 
the rate to 1 cent a pound, reached the sum of $7,485,391. Despite 
the reduction, the following years showed a decrease, the lowest point 
being in 1888, when the deficit amounted to $3,773,138. From that 
time, however, it rose, but the deficit of 1885 was not exceeded until 
1894, when it amounted to $9,913,632, and in 1897 it increased to 
$11,411,779. Later, there were annual reductions until in 1902 the 
deficit fell to $2,937,649. 

It was in the year 1897 that rural free delivery was instituted with 
82 routes, but the expenditure was inconsiderable prior to 1901. It 
increased from $1,750,321 in that year to $36,923,737 in 1910. 

The following statement of the expenses for rural free delivery is 
taken from the department’s report ^: 


Fiscal year. 

Routes. 

Expendi¬ 

ture. 

1897. 

82 
153 
412 
1,259 
3,761 
8,298 
15,119 
24,566 
32,055 
35,766 
37,728 
39,277 
40,628 
41,079 

$14,840 
50,241 
150,012 
420,433 
1.750,321 
4,089,041 
8,051,599 
12,645,275 
20,864,885 
25,011,625 
26,661,555 
34,371,939 
35,661,034 
36,923,737 

1898. 

1899. 

1900. 

1901. 

1902. 

1903. 

1904. 

1905. 

1906. 

1907.‘. . 

1908. 

1909. 

1910. 



Increase in 
expendi¬ 
ture. 


$35,401 
99,771 
270,421 
1,329.888 
2,338,720 
3,962,558 
4,593,676 
18,219,610 
4,146,740 
1,649,930 
2 7,710,384 
1,289,095 
1,262,703 


1 Maximum salary of carriers increased from $600 to $720 per annum. 

2 Maximum salary of carriers increased from $720 to $900 per annum. 


From the year 1902, the deficit rose rapidly, and in 1909 it ex¬ 
ceeded seventeen millions, being the largest in the history of the 
department. 

Owing to the action of the Postmaster General this was reduced 
two-thirds in 1910, and the Commission is informed that for the fiscal 


1 Annual Report, 1910, p. 342, 
























EEPORT OF COMMISSION ON SECOND-CLASS MATTER. 17 

year 1911 it has entirely disappeared. For the first time in many 
years the department will show a surplus in postal funds. 

OPINIONS OF POSTMASTERS GENERAL AS TO MAIL 
COST OF SECOND-CLASS MATTER. 

Our attention has been directed to the fact that the Postmasters 
General in their annual reports have repeatedly commented upon 
the increase in the volume of second-class matter, and upon the dis¬ 
parity between the supposed cost of transporting and handling it in 
the mails and the amount received as postage. Their estimates evi¬ 
dently reflected the opinion of the officers of the department, but 
they were based upon general experience in the service and not upon 
a scientific ascertainment of cost. 

Postmaster General Rissell in 1894 estimated the cost of trans¬ 
porting all mail matter at 8 cents a pound approximately and, ap¬ 
plying this to second-class matter paid at the pound rate, calculated 
a loss in transportation alone of nearly seventeen million dollars. 
Postmaster General Wilson and Postmaster General Gary made their 
calculations in a similar way. In 1901, Postmaster General Smith re¬ 
ported that the Government paid not less than 5 cents a pound for 
transportation of second-class matter and at least 2 cents a pound for 
handling. Postmaster General Payne in 1902 considered the cost of 
the delivery of periodicals to be 4 cents a pound. In 1905, Post¬ 
master General Cortelyou estimated the cost of the service for ail 
mail matter at between 5 and 8 cents a pound, and added that if it 
cost the Government as much as 5 cents a pound for second-class 
matter, paid at the pound rate and free in county, the loss at that 
time was about twenty-seven million dollars.^ 

WEIGHINGS OF 1906. 

In view of the lack of definite knowledge as to the actual cost of 
second-class matter. Congress, by the act of June 26, 1906,^ directed 
the Postmaster General to require a record from July 1 to Decem¬ 
ber 31, 1906, of all second-class mail matter received for free dis¬ 
tribution and also at the 1 cent a pound rate, “so as to show the 
weights in pounds, respectively by classes, of daily newspapers, 
weekly and other than daily newspapers, magazines, scientific period¬ 
icals, educational periodicals, religious periodicals, trade-journal peri¬ 
odicals, agricultural periodicals, miscellaneous periodicals, and sample 
copies.” 

1 Annual Reports, Post Office Department, 1894, pp. 31-33, Postmaster General Bissell; 
1895, pp. 31-32, 1896, pp. 7-8, Postmaster General Wilson; 1897, pp. 6-7, Postmaster 
General Gary; 1901, pp. 13-16, Postmaster General Smith; 1905, pp. 75-76, Postmaster 
General Cortelyou. 

2 34 Stat., p. 473, chap. 3546. 

29552°—12-3 



18 REPORT OP COMMISSION ON SECOND-CLASS MATTER. 

Weighing was had accordingly, and in addition we are advised 
that special reports were required of all weights of second-class mail 
dispatched from 427 post offices, covering 95 per cent of the entire 
weight of second-class mails, and showing the States of destination, 
upon which the average haul of each subclass was computed. This 
record was submitted to Congress on February 1, 1907.^ 

THE PENEOSE-OVEKSTEEET COMMISSION. 

Following the recommendation of the Postmaster General, Con¬ 
gress ^ by the same statute which directed the above weighings 
provided for a joint commission on second-class mail matter. 

In the report of this Commission (known as the Penrose-0verstreet 
Commission), submitted to Congress on January 28, 1907,^ it was 
stated that “ the Post-Office Department is not now able and has 
never been able to furnish statistics as to the cost of various classes 
of mail matter class by class. Its inability so to do is demonstrated 
by the fact that from the beginning of the second-class controversy 
its only way of getting at the relative cost of second-class matter 
has been the crude method of dividing the total cost of the service 
by the total number of pounds carried and declaring the quotient to 
be the cost of carrying a pound of second-class matter.” And, 
further, that “ until the entire system of expenditure, accounting and 
bookkeeping in the Post-Office Department is completely overhauled 
and put upon a new basis it will be impossible, even with all the re¬ 
sults from the present weighing” (referring to the weighing of 
1906) “statistically to ascertain the cost of the respective classes.”^ 

The Commission accordingly were of the opinion that the depart¬ 
mental inquiry of 1906 should be supplemented. It emphasized as 
strongly as possible “ the necessity of such an examination into oper¬ 
ating expenses of the Post-Office Department ” as would enable Con¬ 
gress “ ultimately to place postage rates upon a firm, just, and busi¬ 
nesslike basis.” The authorized weighing of 1906, it was said, did 
not go far enough. While that would “ ascertain the weight of the 
various kinds of second-class matter and the average haul of each 
of those kinds,” it would afford little help in determining the cost 
for the reason that “the weight of the other classes of matter not 
being ascertained, the proportionate weight of second-class matter, 
as well as the proportionate length of its haul,” would still remain 
largely a matter of conjecture. There had also been a failure to 
provide for the counting of the pieces of second-class matter, and as 
the Commission said, “ the cost of that class is by no means to be 

1 H. Doc. No. 651, 59th Cong., 2d sess. 

*Act of June 26, 1906, chap. 3546, 34 Stat., p. 477. 

* H. Doc. No. 608, 59th Cong., 2d sess. 

Md., p. 22. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


19 


measured simply by weight, the handling of the individual pieces 
and the weight of that piece being also essential factors.” 

The Commission therefore recommended a new weighing, similar 
to that of 1906, but extended so as to embrace for the period of six 
months, beginning July 1, 1907, the following: 

(a) A weighing of all mail matter transported throughout the entire United 
States, class by class; (6) a counting of all pieces of mail matter, class by 
class; (c) a weighing and counting combined of the individual pieces of third, 
fourth, and second class matter, according to its natural subdivision, in such 
manner as to show not merely the average weight of a piece of such matter, but 
the average weight of the individual pieces according to the classification in 
respect of character and method of handling; (d) the ascertainment of the 
average haul of all classes of matter under each subdivision of those classes; 
and (e) the ascertainment of the average load of railway post-office cars, as 
well as the average load of storage cars. 

The statistics thus obtained, it was believed, would furnish some 
evidence upon which the actual cost of the various classes of matter 
could be computed, but even this would be far from a complete basis. 
There must also be “ an analysis of all operating expenses, with a 
view to their proper separation between the various kinds of service 
rendered.” This was something that the Post Office Department had 
never attempted, and it was added that “ if in fact such an analysis 
and separation of operating expenses is impossible, then that fact 
should be definitely and conclusively determined.” ^ 

The Commission was of opinion that the “ whole business system ” 
of the postal service should be examined by expert accountants and 
statisticians outside the department, precisely as if they were em¬ 
ployed to reorganize a private enterprise. And in furtherance of 
this proposal it was recommended that in addition to the enactment 
into law of the other reforms discussed in the report and embodied 
in the bill which accompanied it, a commission should be created 
to make a thorough investigation of the Post Office Department in 
all its branches, with a view to determining, first, the true cost of 
every kind of service it renders; second, the proper division of the 
operating expenses of the whole service between the different classes 
of matter; and third, what modifications of the then system of book¬ 
keeping and accounting, or what other system, were advisable.^ 

EEPORT ON BUSINESS METHODS OF THE POST OFFICE 
DEPAETMENT. 

In accordance with this recommendation. Congress by the act of 
March 2, 1907,^ authorized the appointment of a joint commission, 
which was composed of those who had served on the former com¬ 
mission. Public accountants were employed in April, 1907, and after 


1 H. Doc. No. 608, 59th Cong., 2d sess., pp. 46, 47. 

2 Id., p. 48. 


3 Chap. 2513, 34 Stat., 1216. 




20 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

a careful investigation of the methods of the department made their 
report under date of September 30, 1907, which the Commission sub¬ 
mitted to Congress.^ 

WEIGHINGS OF 1907. 

The statute which provided for the above inquiry also directed the 
Postmaster General to keep the following records: ^ 

(1) From July 1, to December 31, 1907, inclusive, “ of the weight in pounds, 
respectively, of first-class, second-class, free, paid-at-the-pound rate, and trans¬ 
ient, third-class, and fourth-class matter and all franked and penalty matter 
and the equipment carried in connection therewith.” 

(2) For thirty days during said period, “ of the weight of each of the classes 
above specified dispatched from such post-oflBlces as he shall determine to be 
representative for the purpose.” On this there was to be computed “ in the 
most practicable way, the average haul of the mail of the different classes and 
subclasses ” above mentioned. 

(3) For seven days during said period, of the revenue received from each 
of the said classes and subclasses and of the number of pieces of each class 
and subclass, showing also for the first class the number of letters, postal cards, 
and other matter separately. 

(4) For thirty consecutive days during said period, “ for the purpose of ascer¬ 
taining the average load of railway post-office cars other than storage cars, 
the average load of storage cars, and the average load in compartment cars.” 

The matter was placed in charge of the Second Assistant Post¬ 
master General and was under the immediate supervision of a de¬ 
partmental committee; and under date of May 1,1908, the Postmaster 
General submitted to Congress a report of the records which had 
been kept and of the computations based thereon.® 

DEPARTMENT’S CALCULATIONS OF COST. 

Availing itself of these statistics, the department undertook an 
analysis of all operating expenses in order to assign them to the dif¬ 
ferent classes of mail matter according to the service performed. By 
order of October 17, 1908, this undertaking was confided by Post¬ 
master General Meyer to a committee in the department, which was 
continued by Postmaster General Hitchcock. The work was com¬ 
pleted in the following year and was submitted to the Postmaster 
General under date of November 1, 1909.^ The report purported to 
show the cost of transporting and handling the several classes of 
mail matter, and of conducting the registry, money-order and special- 
delivery services for the fiscal year 1908. 

We shall have frequent occasion to refer critically to these records 
and computations, but it may now be said that it is entirely evident 


1 Preliminary Report of Joint Commission on Business Methods of Post Office Depart¬ 
ment and Postal Service, S. Kept. No. 201, 60th Cong., 1st sess. 

2 Act of Mar. 2, 1907, chap. 2513, 34 Stat., p. 1216. 

» Special Weighing of the Mails of 1907, etc., H. Doc. No. 910, 60th Cong., 1st sess. 
<Cost of Transporting and Handling the Several Classes of Mail Matter, etc. (Ex¬ 
hibit 3). 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 21 

that the officers of the department devoted themselves to their difficult 
task with the sincere desire to use every means at their command to 
accomplish the purpose of Congress and to secure trustworthy results 
upon which an accurate determination and apportionment of cost 
could be made. 

According to the calculations of the department, second-class mail 
matter cost the Government over 9 cents a pound for transportation 
and handling, causing a loss per pound of over 8 cents, and in his 
annual report for 1909, the Postmaster General reviewed various 
suggestions for increase of revenue.^ At the hearings held by the 
Committee on the Post Office and Post Roads of the House of Rep¬ 
resentatives in January and February, 1910, the departmental com¬ 
putations were presented and many parties and organizations oppos¬ 
ing an increase in rates were heard. Further consideration of the 
matter led to the adoption of the resolution authorizing the present 
inquiry. 

COST OF TRANSPORTING AND HANDLING SECOND- 
CLASS MAIL MATTER. 

As the ordinary records of the department do not show separately 
the expense incurred in connection with each class of mail matter, 
it is obviously necessary to deal with the particular period during 
which special information was obtained; and the evidence before 
the Commission chiefly relates to the fiscal year 1908 (July 1, 1907, 
to June 30, 1908). Similar records are not available for the subse¬ 
quent years. 

We shall, therefore, first examine the data submitted with respect 
to cost in the different branches of the post-office service for the fiscal 
j-ear 1908, and after stating our conclusions for that period we shall 
inquire how far they may fairly be regarded as applicable to exist¬ 
ing conditions. 

FIRST. MAIL COST OF SECOND-CLASS MATTER FOR THE 
FISCAL YEAR 1908. 

The evidence includes: 

(1) The annual report of the operations of the department. 

(2) Report of the weighings of all classes of mail matter origi¬ 
nating in the United States for a period of six months from July 1, 
to December 31, 1907. 

Instructions were sent to all postmasters, approximately 62,000, 
and reports were received from over 98 per cent of these and from 
all railway post offices.^ 

The estimated weight in pounds of each class of mail matter for the 
fiscal year 1908 was obtained by taking the results of the special weigh¬ 
ings, 184 days, reducing the same to one day and multiplying by 366. 

1 Annu.al Report, 1909, p. 9. 

2 Report of Special Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., p. 5. 



22 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

(3) Keport of the weighing for thirty days from September 30, to 
October 30, 1907, of the mails originating at selected post offices, and 
the computation of the average haul thereon. 

The selected post offices were as follows: Of the first class, 139; 
of the second class, 113; of the third class, 124; and of the fourth 
class, 434. The selection is said to have been made after an examina¬ 
tion of the reports received of the weighing for the month of July, 
1907, and “with careful consideration of their representative char¬ 
acter as to class, amount of mails represented, and geographical dis¬ 
tribution.” As nearly as practicable similar representation was 
given to each State and Territory. The department states that “ the 
volume of mails originating at these selected post offices represents 
approximately 85 per cent of the entire weight of mails originating 
in the United States, and approximately 23 per cent of the total 
weight of equipment used in connection with the mails for the entire 
United States for a like period.” ^ Of the 810 post offices above men¬ 
tioned, 790 reported. Computation was also made, based on special 
weighings for this period, of the average loads carried in railway 
post-office cars, storage cars, and compartment cars. 

(4) Count for seven days from October 12 to 19, 1907, of the num¬ 
ber of pieces of each class and the amount of revenue received from 
each. Keports were required from 62,655 post offices and over 97 
per cent reported.^ The estimated number of pieces of each class of 
mail matter for the entire year was taken by reducing the number 
shown by the count for seven days to one day and multiplying by 366. 

There was also a record kept during these seven days—in all post 
offices of the first, second and third classes, and in the representative 
offices of the fourth class selected for the thirty days’ weighing—of 
the weights of all the domestic mails (by classes and subclasses) 
embraced in the coi^nt of pieces. 

In addition to these records, which related to the fiscal year 1908 
or parts thereof, there were also available certain special reports with 
respect to other periods—some of which were used in the manner 
hereafter stated in making the computations for 1908—^to wit: 

(5) Weighings of second-class matter for six months from July 
1, 1906, to December 31, 1906, by subclasses as defined in the act of 
June 26, 1906.^ 

(6) Count, seven days, November 13 to 20, 1910, on full and apart¬ 
ment railway post-office lines, in order to ascertain average number of 
letters to a package and of pieces to a sack. 

(7) Count of mail matter collected and delivered on 39,794 rural 
routes during May, 1911. 

1 Report of Special Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., pp. 13, 14. 
See Infra, pp. 38, 47. 

2 Id., p. 10. 

sCh. 3546, 34 Stat., 473. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 23 

(8) Report of time spent in handling mail in representative post 
offices during May, 1911. 

(9) Count from August 25, to September 25, 1911, of newsdealers’ 
packages of second-class matter, separately, and of all other pieces of 
second-class matter paid at the pound rate. 

TOTAL MAIL MATTER. 

The total amount of mail matter in the fiscal year 1908, by esti¬ 
mated weight and number of pieces, is thus shown in the table origi¬ 
nally submitted by the department: ^ 

“ Table 3. —Shotvinff weight of mail and numlyer of pieces, hy classes, for the 
fiscal year 1908 (366 days), based on the special weighing of the mails of 
1901, except foreign mail, the pieces of which are taken from report of 
Second Assistant Postmaster General, 1908 (p. 26). 


Class of mail. 


Estimated weight in pounds. 


Estimated number of pieces. 


First class: i 

Letters. 

Postal cards.. 
Other matter 


5,632,612,998 

1,457,151,721 

12,940,087 


Total for first class.. 
Second class: 

Paid at pound rate— 
Subscribers’ copies 
Sample copies. 


157,502,610 


7,102,704,806 


679,048,950 

25,167,258 


3,184,691,329 

190,378,508 


Total paid at pound rate.. 

Free in county. 

Transient 2. 

Local delivery— 3 

1 cent a copy. 

2 cents a copy. 

Total for local delivery 

Total for second class.. 

Third class. 

Fourth class. 

Congressional free (franked). 

Departmental free (penalty). 

Total paid matter. 

Total free matter. 


704,216,208 

52,867,236 

24,437,454 

1,416,420 

2,895,792 


4,312,212 


1,129,052,538 
100,490,790 


3,375,069,837 

340,830,075 

73,261,958 


♦785,833,110 

179,694,654 

58,889,400 

4,531,080 

43,092,474 


9,415,298 

7,006,861 


16,422,159 


12,433,728,889 

581,554,236 


3,805,584,029 

1,720,964,103 

145,306,026 

9,007,574 

231,716,587 


Grand total domestic matter. 

Foreign. 

Foreign pieces received ( 250 , 122 , 981 ) 


1,229,543,328 
6 60,814,956 


13,015,283,125 
6 308,001,320 


Grand total, foreign and domestic 
Equipment: 

Domestic. 

Foreign. 


1,290,358,284 

930,757,032 
11,214,008 


13,323,284,445 


Total, all mall and equipment. 


2,232,329,324 


13,323,284,445 


1 The weight of the subclasses of first-class matter was not taken separately, but the number of pieces In 
these subclasses was counted during the seven days’ count. 

2 Transient second-class matter includes matter of the second class mailed by other than publishers and 
news agents chargeable with postage at the rate of 1 cent for each 4 oxmces or fraction thereof, fully prepaid 
by stamps affixed (sec. 455, Postal Laws and Regulations, 1902, p. 207). 

3 Local delivery second-class matter represents publications mailed at the office of origin, when such office 
is a free-delivery office, for delivery by carriers, and published less frequently than weekly, upon which the 
postage rate is 1 cent for each copy if weighing not more than 2 ounces; if weighing more than 2 ounces a 
copy, the postage rate is 2 cents a copy (sec. 472, Postal Laws and Regulations, 1902, p. 205). 

♦ Does not Include 6,747,857 pounds of second-class matter mailed by publishers in the United States to 
subscribers in Canada. 

6 Includes 6,747,857 pounds of second-class matter mailed by publishers in the United States to sub¬ 
scribers in Canada; and also Includes both foreign mail dispatched and -received as showm by the special 
weighing of the mails of 1907 (Table J, following p. 23), extended to show the weight for 1 year. 

0 Includes mail dispatched only, no record having been taken of foreign pieces received. Includes mail 
going to Canada and Mexico. 

’ No revenue, but considered in connection with handlings.” 


1 Table 3 ; Exhibit 3, p. 5 ; Exhibits 7, 94, 200, p. 20; Exhibit 201, p. 5. 






















































24 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


This table illustrates the difficulty of obtaining accurate results 
from records applicable only to a portion of the period to which the 
inquiry relates. The weight is derived from the six months’ weigh¬ 
ing, and assuming that to have been done correctly, this estimate 
would be accurate if the amounts of the different classes of mail 
matter in the second half year were equal to those of the first half. 
But the actual weight of second-class matter paid at the pound rate in 
the second six months (January 1 to June 30,1908) was considerably 
less than in the six months preceding. There is an annual record of 
this class of matter and the amount reported for the fiscal year was 
694,865,884 pounds,^ instead of 704,216,208 pounds, as shown in the 
above table. The weight for the first half year (according to the 
special weighings) was 354,032,232 pounds,^ leaving only 340,833,- 
652 pounds for the second half year. It is stated by the depart¬ 
ment that there was also a decrease in the latter period of other 
classes of mail matter, as shown by a falling off in revenue from the 
sale of stamps and from third and fourth class postage paid in 
money.^ It can not be said, however, that the decreases in weights 
of the different classes were in the precise ratio of the weight shown 
for the first six months.^ 

The number of pieces in the mails during the year as given in the 
above table is derived from the count of seven days (October 12, to 
19, 1907), and the danger of inaccuracy in this estimate is increased 
by the shortness of the time for which the special record was made. 
Calculated on this basis, the number of pieces of second-class matter 
paid at the pound rate is stated to be 3,375,069,837. It is urged on 
behalf of the publishers that the volume of this class of matter was 
unusually large during the period selected, the magazines being at 
their highest point in number and weight on account of the Christmas 
advertising. With respect to fourth-class matter, on the other hand, 
it is thought by the department that the seven days’ count showed 
a smaller number of pieces than the average for the weighing period 
of six months, and a revision of the above table was submitted to the 
Commission on October 20, 1911, in which the estimated number of 


1 Annual Report, 1908, p. 64. 

a Table I. Special Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., p. 23. 

8 Memorandum of Oct. 28, 1911, on Behalf of the Post OfiSce Department in Reply to 
“ Memorandum Filed on Behalf of the Publishers of Certain Magazines,” pp. 4, 5. 

*This, the department contends, is not to the disadvantage of paid-at-the-pound- 
rate matter, and a calculation has been presented to show that the percentage of decrease 
In weight in other classes of mail matter, taken together, was slightly in excess of the 
percentage of decrease in the weight of pound-rate matter of the second class. Id. 
(Appendix A.) By an error in the computation the decrease in the other classes of mail 
was multiplied by 3; the true percentage of decrease ascertained from the data used 
being about two-fifths of that of second-class mail. But the difference, which is only one 
per cent, does not greatly affect the result; and if, as is believed, the proportion of 
second-class mail in the second six months was abnormally small the result would not 
present the same inaccuracy for a normal year. 



REPOKT OF COMMISSION ON SECOND-CLASS MATTEB. 


25 


pieces of fourth-class matter was increased from 145,306,026 to 
186,090,504, while the estimate for other classes was left unchanged.^ 
The department makes its new calculation by multiplying the weight 
of fourth-class matter for the year, as estimated in the above table, by 
the number of fourth-class pieces to the pound as ascertained during 
the seven days. If this method were applied to second-class matter 
paid at the pound rate—that is, taking the average number of pieces 
to the pound of that sort of matter, as shown by the seven days’ 
count,^ and multiplying it by the estimated weight for the year—^the 
total number of pieces would be 2,971,792,397, instead of 3,375,069,837. 
As the purpose of the table is to establish the relation between the 
different classes of mail, it is evident that whatever method of com¬ 
putation be adopted it should be used, not for fourth class only, but 
for all classes; and for this reason we can not accept the department’s 
table as revised. 

We deem it unnecessary, however, to make a recalculation for all 
classes of mail. If it were made, we should not be assured of abso¬ 
lutely exact results. The number of pieces ascertained from the seven 
days’ count is used only in determining the ratio between the different 
sorts of mail, in order to apportion the amount paid for post-office 
cars and the other expenses of the railway mail service.® For this 
purpose we prefer to take the number of pieces actually counted dur¬ 
ing this period, instead of an estimated number which we have no 
reason to suppose would bring us nearer the truth with respect to 
the relation between the classes of mail. Accordingly we leave the 
table as the department originally presented it. 

We may add that because these estimates can not be regarded as 
absolutely accurate, it does not follow that they should be discarded 
for the purpose of the present inquiry. We are dealing necessarily 
with approximations, and while in reaching a conclusion care must 
be taken to make suitable allowances for a margin of error, ‘this does 
not appear to be so wide as to make it improper to use the estimates 
based on the six months’ weighing and the seven days’ count, in order 
to form a reasonable judgment as to cost. 

1 Supplemental Statement on Behalf of the Post Office Department Showing Results of 
Tabulations and Estimates Submitted Oct. 20 and 21, 1911, pp. 7-10. 

2 This number is 4.22. See Table Y, Special Weighings of 1907, H. Doc. No. 910, 60th 
Cong., 1st sess., p. 33. 

s See infra, pp. 68, 62. 



26 


KEPORT OF COMMISSION ON SECOND-CLASS MATTER. 


APPOKTIONMENT OF REVENUES. 

The total revenue for the fiscal year 1908 is thus stated in the an¬ 
nual report of the department: ^ 

“ Bbief Series No. 1 (Table 1).— Showing the revenues of the postal service for 
the fiscal year 1908, according to statutory classification. 

Ordinary postal revenue, consisting of sales of postage 
stamps, stamped envelopes, newspaper wrappers, and postal 


cards_$173, 374, 712.02 

Second-class postage (pound rate), paid in money_ 6,950,506.75 

Receipts from box rents_ 3, 833, 303. 55 

Third and fourth class postage paid in money_ 3, 033, 943.45 

Letter postage paid in money (made up principally of bal¬ 
ances due from foreign administration)_ 107,482.11 

Fines and penalties_ 101,272. 01 

Miscellaneous receipts_ 93, 985. 68 

- Receipts from unclaimed dead letters_ 36, 644.06 


Total ordinary postal revenue- 187, 531, 849.63 

Receipts from money-order business- 3, 677, 755.44 

Unpaid money orders more than 1 year old_ 269,058. 34 


Total_ 191, 478, 663. 41 ” 

In order to apportion this revenue among the several classes of 


mail matter, the department first deducted the amounts received for 
special services and foreign mail as follows: ^ 


Registry fees_$2, 889,912. 80 

Money-order fees_ 3, 946, 813. 78 

Special-delivery postage_ 1, 373,451.40 

Foreign mail- 8, 585, 564. 24 


Total_ 16, 795, 742. 22 


The remainder of the revenue ($174,682,921.19) was divided by 
the department, in its first statement, according to the percentages 
found to exist in the count of revenue during the seven days (Oc¬ 
tober 12 to 19,1907), with the following result:® 


Class. 

Per cent. 

Amount. 

First class. 

75.74 
5.19 
14.63 
4.44 

$132,304,844.61 
9,066,043. 61 
25,556,111.37 
7,755,921.70 

Second class. 

Third class. 

Fourth class. 

Total. 

100.00 

174,682,9:^.19 



On October 20, 1911, the department submitted a revised table in¬ 
troducing changes due to a new calculation of the revenue from 


1 Annual Report, 1908, pp. 253, 254; Supplemental Statement Oct. 20, 21, 1911; p. 4; 
Exhibit 3, p. 5 ; Exhibits 7, 94, 200, p. 17 ; Exhibit 201, p. 2. 

2 Exhibit 3, p. 6; Exhibits 7, 94, 200, p. 21; Exhibit 201, p. 6. 

8 Id. See Table O, Special Weighings of 1907, H. Doc. No. 910, 60th Cong., Ist sess., 

p. 26. 




































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 27 

fourth-class matter. By this method, instead of taking the per¬ 
centage of revenue as actually ascertained during the seven days, a 
new estimated revenue was computed for fourth-class matter by using 
the estimated weight for the year, reducing it to a seven days’ basis, 
and multiplying the result by the number of pieces per pound and 
the product by the revenue per piece as shown during the seven days’ 
count.^ This estimate of revenue from fourth-class matter for the 
seven days amounted to $193,971.38, instead of $153,250.22, the 
actual revenue. By taking the former in connection with the actual 
revenues for the other classes of mail, new percentages were obtained 
for the seven days, in accordance with which the revenue for the 
year was apportioned as follows: 


Class. 

Percent. 

Amount. 

First class. 

74.86 

$130,767,634.80 
8,961,233.86 
25,241,682.11 
9,712,370.42 

Second class. 

5.13 

Third class. 

14.45 

Fourth class. 

5.66 



100.00 

174,682,921.19 


The object of the department, in its new computation, is to correct 
what it believes to be an error in the calculation for the year with 
respect to fourth-class matter, which, on the revenue previously as¬ 
signed to it, shows a less amount received per pound than 16 cents, 
which would be the minimum if postage were fully paid. 

We are of opinion that this change in method, if made as to one 
class, should be made as to all classes; but we see no sufficient reason 
for an elaborate calculation based on the number of pieces to the 
pound and revenue per piece, during the seven days, instead of taking 
the actual percentage of revenue for the different classes as found 
during that period. While the result may appear to be more satis¬ 
factory with respect to fourth-class matter, it is not necessarily cor¬ 
rect as to the other classes. It would reduce the amount of revenue 
to be assigned to second-class matter, and we shall give to this class 
the benefit of the doubt by apportioning the revenue in the manner 
first proposed by the department. The difference is not a large one, 
and, from every point of view, it would seem clear that we shall thus 
assign to second-class matter all the revenue to which it can be 
entitled. 


1 Supplemental Statement Oct. 20, 21, 1911, pp. 6-11. 














28 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

CLASSIFICATION OF EXPENDITUEES. 

The expenditures for the fiscal year 1908 are set forth in the follow¬ 
ing statement submitted by the department: ^ 

“Brief Series No. 2 (Table 2). —Showing the appropriations for the postal 
service for the fiscal year 1908, according to the digest headings of congres¬ 
sional acts, and the expenditures thereunder.^ 


Service. 


Appropria¬ 

tions. 


Expended to 
Sept. 30,1908. 


Office of the Postmaster General: 

Advertising. 

Post-office inspectors. 

Rewards. 

Printing and binding opinions of Assistant Attorney General... 

Miscellaneous items. 

Office of the First Assistant Postmaster General: 

Compensation to postmasters. 

Compensation to assistant postmasters and clerks in post offices 
Rent, light, and fuel at first, second, and third class post offices. 

Miscellaneous items at first and second class post offices. 

Canceling machines. 

Assistant superintendents. Division of Salaries and Allowances. 

City Delivery Service. 

Special delivery service. 

Miscellaneous items. 

Office of the Second Assistant Postmaster General: 

Inland mail transportation, star routes. 

Inland mail transportation, steamboat routes. 

Mail messengers. 

Pneumatic tubes. 

Regulation screen wagon.. 

Inland mail transportation, railroad,,. 

Freight on railroads.. 

Railway post-office car service.. 

Inland maU transportation, electric and cable cars. 

Mail bags.. 

Mail locks and keys. 

Rent and equipment of buildings for Post Office Department... 

Railway Mail Service.. 

Transportation of foreign mails.. 

Balance due foreign countries. 

Miscellaneous items.. 

Office of the Third Assistant Postmaster General: 

Manufacture of postage stamps. 

Manufacture of stamped envelopes and newspaper wrappers. 

Distribution of stamped envelopes and newspaper wrappers. 

Manufacture of postal cards. 

Distribution of postal cards. 

Ship, steamboat, and way letters. 

Indemnities for losses by registered mail (first class). 

Special counsel, suits second-class mailing privilege. 

Payment of money orders more than 1 year old. 

Miscellaneous items. 

Office of the Fourth Assistant Postmaster General: 

Stationery for postal and money-order service. 

Registered package, tag, official and dead-letter envelopes. 

Blanks, etc., for money-order service. 

Blanks, blank books, etc., for registry system. 

Supplies, City Delivery Service. 

Postmarking, rating, and money-order stamps. 

Letter balances, scales, and test weights. 

Wrapping paper. 

Wrapping twine. 

Packing boxes, sawdust, paste, and hardware. 

Printing facing slips, etc. 

Typewriters, copying presses, etc. 

Rural Delivery Service. 

Shipment of supplies. 

Distribution of official and registry envelopes. 

Miscellaneous items. 

Total. 


$5,000.00 
1,136,770.00 
20,000.00 
10,000.00 
1 , 000.00 

25,500,000.00 
31,367,000.00 
3,229,000.00 
275,000.00 
275,000.00 
34,600.00 
26.914,300.00 
1,085,000.00 
1,000.00 

7,250,000.00 
829,000.00 
1,427,000.00 
1,250,000.00 
1,321,000 00 
44,660,000.00 
250,000.00 
5,080,000.00 
870,000.00 
447,500.00 
47,500.00 
43,855.00 
17,749,843.00 
3,270,500.00 
179,000.00 
1 , 000.00 

509,000.00 
1,275,000.00 
22,060.00 
214,000.00 
5,720.00 
500.00 
10,000.00 
2,787. 68 
378,010.97 
1,000.00 

95,000.00 
200 , 000.00 
200 , 000.00 
5,000.00 
80,000.00 
35,000.00 
10 , 000.00 
13,000.00 
300,000.00 
2,500.00 
60,000.00 
80,000.00 
34,985,000.00 
100 , 000.00 
11 , 020.00 
1 , 000.00 


213,125,466.65 


H 456.64 
1,060,847.90 
1,938.84 


228.35 

2 25,599,397.52 
30,903,351.75 
3,193,820.94 
254,637.37 
274,011.09 
30,747.03 
26,343,201.19 
2 1,108,164.35 
689.95 

7,125,025.30 
763,333.75 
1,416,300.19 
482,812.62 
1,319,017.18 
43,588,012.70 
211,497.07 
4,567,366.25 
791,733.33 
447,500.00 
44,736.10 
43,511.31 
17,373,336.92 
2,844,679.63 
138,052.82 
805.58 

494,046.04 
1,094,100.49 
21,004.47 
180,152.98 
5,716.59 
124.76 
1,461.67 
2,783.33 
378,010.97 
802.34 

94,059.75 
197,178.74 
198,968.65 
3,030.81 
67,050.60 
34,979.79 
7,814.85 
10,141.03 
280,378.09 
2,500.00 
42,746.36 
78,699.74 
34,355,209.04 
40,674.99 
2,852.06 
520.30 


, 207,528,222.11 


“ 1 From Annual Reports of the Post Office Department, 1908, pp. 332-333. 
“ 2 Expended in excess of appropriation, but by authority of law.” 


1 Supplemental Statement, Oct. 20, 21, 1911, pp. 5, 6; Exhibit 3, pp. 4, 5 ; Exhibits 7, 
94, 200, pp. 18, 19 ; Exhibit 201, pp. 3, 4. 







































































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


29 


“ To the above total expenditures of $207,528,222.11 should be 


added the following: 

“Amount expended under legislalive act for the Post Office 

Department _ $1,622, 564. 24 

“Amount appropriated under legislative act for the office of 

the Auditor for the Post Office Department_ 824, 870.00 

“Amount expended under legislative act for the office of the 
Assistant Attorney General for the Post Office Department- 5,000.00 

“Transportation accounts certified to the Secretary of the 
Treasury for credit of aided Pacific roads not charged to 
postal revenues_ 751, 099. 69 


“Total_ 210,731,756.04 

“ From this should be deducted the amount paid ocean steam¬ 
ship companies under contracts in accordance with the act 


of March 3,1891, for ocean mail service, in excess of amount 
which would have been allowed had the carrying steamers 
not been under such contracts_ 626, 261. 04 


“ Total expenditures applicable to the cost of the va¬ 
rious classes of mail matter and the special services. 210,105,495. 00 ” 

With respect to the various services performed,* these expenses 
may be classified as follows (the items are taken from the depart¬ 
ment’s records) : 

(1) Transportation, including— 

Railroad transportation-$44, 267, 507.13 ^ 

Other transportation- 11, 898, 222. 37 


56,165, 729. 50 
4, 638, 971. 51 == 

-$60, 804, 701.01 


17, 373, 336. 92 
34, 355, 209. 04 


86 , 392, 896. 35 

8,130, 207. 57 
3, 049,144.11 

- 149, 300, 793. 99 


210,105, 495. 00 


1 Includes .$679,494.43 credit certified in favor of Central Pacific Railway Co., aided. 
Annual Report, 1908, p. 333. 

2 Includes similar credit of $71,605.26; Id. 


Railway post-office car service. 


(2) Handling, or distribution and delivery, in¬ 
cluding— 

Railway mail service- 

Rural delivery service- 

General post-office service, including 
salaries of postmasters, assistant 
postmasters, clerks and carriers, etc- 
Miscellaneous expenses— 

Directly assignable- 

Not directly assignable- 























30 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

APPOETIONMENT OF EXPENSES AMONG CLASSES AND 
SUBCLASSES OF MAIL. 

In its computations, for the purpose of apportioning these outlays, 
the department has dealt with these classes and subclasses: 

First class. 

Second class: 

Paid at the pound rate. 

Free in county. 

Transient. 

To Canada. 

Local delivery. 

Third class. 

Fourth class. 

Congressional free (franked). 

Departmental free (penalty). 

Foreign. 

Special service: 

Registry. 

Money order. 

Special delivery. 

It is insisted that there are other subdivisions of the principal 
classes w'hich should have been separately considered, and that the 
cost should have been ascertained for each with respect to the par¬ 
ticular service required. The contention may be said chiefly to 
concern handling (that is, distribution and delivery), and forms 
part of the criticism of the nature and adequacy of the data sub¬ 
mitted under that head. 

It is also urged that in the joint resolution providing for this 
Commission, Congress contemplated an inquiry with respect to the 
cost of each of the subclasses of second-class mail described in the 
act of June 26, 1906,^ to wit: (1) daily newspapers, (2) weekly 
and other than daily newspapers, (3) magazines, (4) scientific peri¬ 
odicals, (5) educational periodicals, (6) religious periodicals, (7) 
trade-journal periodicals, (8) agricultural periodicals, and (9) mis¬ 
cellaneous periodicals. The department contends that the joint 
resolution refers to the classification which it has used in its appor¬ 
tionment. Without expressing an opinion as to the intent of Con¬ 
gress, it is sufficient to say that the special records under the act 
of March 2, 1907,- were not kept separately for the subclasses men¬ 
tioned in the act of 1906, and that the only direct data before the Com¬ 
mission for the fiscal year 1908 relate to the classification made by 
the department. 


134 Stat., 473. 


234 Stat., 1216. 




BEPORT OP COMMISSION ON SECOND-CLASS MATTER. 31 

The facts ascertained by the special weighings of 1906 are avail¬ 
able, however, and by the use of the ratios which these afford cer¬ 
tain estimates have been submitted as to the relative cost of the sub¬ 
classes described by the act of 1906. The value of these, and the 
inferences which may be drawn from them, will have appropriate 
consideration.^ 

A. APPORTIONMENT OE COST OF TRANSPORTATION. 

1. KAILKOAD TRANSPORTATION. 

The cost of the transportation of mails by railroad for the fiscal 
year 1908, as above stated, was $44,267,507.13. 

In its original estimate, the department attributed to second-class 
matter 52.99 per cent of this cost, or $23,457,352.03. By corrections 
made in the course of the present inquiry, this amount has been re¬ 
duced $1,297,037.96, and in its calculation, as finally revised, the 
department places the share of second-class mail at $22,160,314.07, or 
50.06 per cent. 

The compensation paid the railroads for transporting the mails is 
a certain amount per mile per annum, based on the average weight 
per day carried over the whole length of the mail route. The average 
weight is ascertained every four years by special weighings for that 
purpose, a weighing being had annually in one of the four districts 
into which the country is divided. 

The schedule of rates was fixed by the act of March 3,1873.^ This 
was reduced 10 per cent in 1876; ^ and a reduction of 5 per cent was 
made in 1878.^ The act of March 2, 1907,® provided for a decrease 
of rates on routes where the average weight per day was between 
5,000 pounds and 48,000 pounds, and on those where it was over 
48,000 pounds, respectively. The following was the schedule in force 
during 1908: ® 


1 Infra, pp. 96, 97. 

2 Chap. 231, sec. 1, 17 Stat., 558. 

8 Act of July 12, 1876, chap. 179, 19 Stat., 78. 

* Act of June 17, 1878, chap. 259, 20 Stat., 140. 

8 Chap. 2513, 34 Stat., 1212. 

8 It is still in force, save that by the act of May 12, 1910, chap. 230, 36 Stat., 362, the 
compensation on land-grant railroads for each 2,000 pounds carried in excess of 48,000 
pounds was reduced from $17.10 to $15.39. 



32 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


Schedule of rates for railway-mail transportation. 


Pay per mile per annum. 


Average weight of mails per day carried over 
whole length of route. 


Rates allow¬ 
able under 
act of Mar. 3, 
1873. 


Rates allow¬ 
able under 
acts of July 
12,1876, June 
17,1878, and 
Mar. 2,1907. 


Rates allow¬ 
able to land- 
grant rail¬ 
roads under 
acts of July 
12,1876, June 
17, 1878, and 
Mar. 2, 1907. 


Intermediate 
weight war¬ 
ranting allow¬ 
ance of $1 
per mile un¬ 
der the law 
of 1873 and 
the custom 
of the depart¬ 
ment, sub¬ 
ject to acts 
of July 12, 
1876, June 17, 
1878, and 
Mar. 2, 1907. 


Pounds. 


200 pounds. 

200 to 500 pounds. 

500 pounds. 

500 to 1,000 pounds. 

1,000 potmds. 

1,000 to 1,500 pounds. 

1,500 pounds. 

1.500 to 2,000 poimds. 

2,000 pounds. 

2,000 to 3,500 poimds. 

3.500 pounds. 

3,500 to 5,000 pounds. 

5,000 pounds. 

6,000 to 48,000 pounds. 

For every additional 2,000 poimds over 5,000 

pounds and under 48,000 pounds. 


$50.00 

’i66.’66' 

’i2i'66' 

'isd’oo' 

'i7d’66' 

'moo' 


25.00 


$42. 75 
"64.'i2 

’’sd'so' 

’i66.*87 

’i2a2d 

’i49.‘62 

in.'66' 


20.30 


$34 20 

' 'si.'66 


85.50 
162 .’ 66 ' 
ii9.’76' 
i36.’86' 


16.24 


For every 2,000 pounds over 48,000 pounds 


25.00 


19.24 


1 17.10 


{ 


12 


20 


20 


20 


60 


60 


80 


2103. 96 
3 < 116. 96 


1 See note 6, supra, p. 31. Land grant. 

2 Nonland grant. ■* 129.95 pounds since act of May 12, 1910. 

The department has divided the cost of railroad transportation 
among the several classes of mail upon the basis of the pound-miles 
deemed to be attributable to each class. In criticism of this method 
it is said that it takes no account of the effect of the heavy weight 
of second-class matter in reducing, in accordance with the foregoing 
schedule, the amount paid for the transportation of all classes. 

On this point, the public accountants in their report to the Joint 
Commission charged with an examination into the business methods 
of the department said, referring to the cost system they proposed: 
“However carefully and exactly expenses are distributed there will 
always remain certain elements which, theoretically, should be con¬ 
sidered in arriving at cost, but which are incapable of accurate ex¬ 
pression in figures or of being worked into any practicable system. 
Such elements in the present case would include the extra cost occa¬ 
sioned by the frequency and rapidity of service and other considera¬ 
tions of public utility, the preferential treatment accorded to first- 
class mail, and the effect of the large volume of second-class mail in 
reducing the average rate of transportation for all classes, owing 
to the compensation being fixed on a sliding scale according to the 
total weight conveyed. No attempt has been made to reflect these 



































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 33 

elements in the cost system proposed, though they should not, of 
course, be ignored in the formulation of any conclusions from the 
figures derived by that system.” ^ 

We have nothing to add to this, save that the statements on behalf 
of the department would seem to permit the conclusion that on the 
heaviest weight routes where a very large amount of second-class 
matter is carried, the daily average weight of 48,000 pounds would 
be reached irrespective of second-class matter and hence the mini¬ 
mum rate on such routes would be payable without it. What effect, 
if any, the volume of second-class matter may have in securing a 
lower average rate of compensation on routes where the average 
daily weight is less than 48,000 pounds, or on routes where it is not 
largely in excess of that amount, is not shown. 

It is further contended that to apportion the entire cost of rail¬ 
road transportation according to the pound-miles of each class of 
mail is not proper because of the difference in the rates paid on dif¬ 
ferent routes, and that this method produces an unfair result with 
respect to second-class matter, as it is said that the bulk of it is 
transported on the routes where the minimum rate prevails. 

In order to decide the question with certainty it would be neces¬ 
sary to ascertain the amount of each class of mail transported on 
each one of over 3,000 routes in the country which were used in 1908, 
and to apportion the amount paid on each route to each class accord¬ 
ingly. This appears to be impracticable. At all events, we have not 
these data. 

It appears, however, from a statement submitted by the depart¬ 
ment, that of the total annual compensation paid on the routes in 
operation July 1,1908, about 73 per cent was paid on routes carrying 
an average of over 5,000 pounds daily, including those carrying over 
48,000 pounds daily; that over 34 per cent was paid at the minimum 
rate on the latter routes; and that the highest-paid routes (carrying 
211 pounds or less) received a little more than 2 per cent of the entire 
amount paid.^ 

Taking into consideration the fact that second-class matter is 
transported on all mail routes, and the large percentage of the entire 
mail carried on routes where the low rates are in force, we think that 
a reasonable approximation may be made by a division of the whole 
expense of railroad transportation on the pound-mile basis. As was 
said by the expert accountants in the report to which we have re¬ 
ferred, explaining their proposed distribution of cost, “ It is assumed 
that the benefits of the transportation service in the aggregate are 
shared by the various classes of mail in proportion to the weight 

^S. Kept. No. 201, 60tli Cong., 1st sess., p. 88. 
a Exhibit 95. 

29552°—12-4 



34 


REPORT OP COMMISSION ON SECOND-CLASS MATTER. 


carried for each, including equipment and the distance hauled, and 
the distribution of the expense is made on the basis of ton-miles.” ^ 
The decreased expense due to the recent introduction of the system 
of transporting certain second-class mail by fast freight, and to 
other economies, must, of course, be considered in its relation to 
present cost as compared with the year 1908.^ 

The apportionment made by the department, in its final revision, 
is shown in the following tables, the first of which (Table 4, revised)® 
gives the weight of mails and of equipment attributed to the several 
classes, and the second (Table 5, revised),^ the division of expenses 
for railroad transportation according to this weight and the average 
haul. 


1 S. Rept. No. 201, 60th Cong., 1st sess., p. 95. 

2 See infra, pp. 87, 88. 

2 Supplemental Statement of Second Assistant Postmaster General Oct. 20, 21, 1911, 
p. 13. 

* Id., pp. 14, 15. 



Brief Series No. 4 (Table 4, revised ).—Apportionment of the weight of equipment carried on railroads to the several classes of mail matter. 

[Substituted Sept. 13, 1911, by letter, for table submitted to the Commission Aug. 25, 1911, typewritten record, p. 2100, and Exhibit 201, p. 7.] 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


35 


ff-gS 

o 



PL, 


^ a 
S 

o bcCi, 

H'S‘3 
^ cr 
a> 


00 


° n X” 

.£f § 

a 


P- 


S 00 
o o 
(ri 


(MOO (NO 
05 to 
CO o 

CO rococo 
05 ^ 05 
tH O CO 


eJi ^ 

N' 

S oo" 
SOT 

o o 

Oi (N 


s 

s 


o 



( «« w xs 
0 P ^.1 d 

|s.2ftg-So 

^ .Q P. P, 


I V2 

aM 
o 
cS 
w 


O 

o. 


.M 

'S 




® P o 
PU PX3 


to 


o 


CO i-H 00 00 
05 TJ< 05 

1-1 oco 


T-H o o r- 

f-H 05 to 

o O 

to o oTo 
o o 

00 00 00 CO 

cft^^co 

(>4 CO 1-4 
05 1-1 


Cl 05 <N h- 
1-H (M O to 
to 05 O 00 

•^00 CO t-T 
1-1 CO 
CO CO I-H 

of •'^cfco 

OTN(N.o 


X3 

o 

3 

o 

ft 


® d o 
ft <1^33 


rP 

bD 


o'O 
w P 
p 73 
bod. 

a 

4^ C3 


3.a d 

ii —I •”* 

2d 


o 

a 

m 


1^" 

^ (» 


caiocoe<)t^ 

O ^ OT »0 
05 O O 05 to 

irf^jTiCorcr 

O CO CO 05 
i-i<Nt--t^r^ 


00 O CO to to 
000 05 CO CO 
to 1-1 

1-frCcf co'c^ 

CO O 00 t-* 
05 00i-i000 


oo 

05 00 

''t* 00 

g *^or 

CO 
CO 05 


00 05 CO to to 
O T-t 05 OO 
t>. Tjl CO to 

r-T i-T of cf co' 
O O (N 
05 1-i (M 1-H 


05 CO 00 
O (N O 
CO I-H 00 Tf* 

CO c^co'co 
05 05 05 
Tt^ 05 Ol 

^iCcooo 

o to 

O rH 


O to 1 -H 
CO 00 to 

rtToTcf 

00 CO <N 

00 1-t t- 


1-1 00 M 
r- o 05 

00 1-1 TJI 

oToTco 
05 00 to 
05 (Ml-- 


<M O (M 
O 1—< f-** o 
M 05 r- 

00 cdc^To 

05 CO Q 1-1 
CO 1—1 O to 


CO 00 
CO <M 
05 <35 

of 00 

to 1—1 
to 

cfoT 


o 

ft 


'S.’S 

.®Pd 

^ d 


OT 

S -I 
o (M 
^ GO 


(N 05 (M I— 
tH M Q to 
to 05 o 00 

^ocTcfi-f 

1-H CO 

CO CO 1-H r«- 

cf ^c^co' 
05 (M Ol 
CO 


OOOOlMO 
O 00 i-H ^ M 
CO M t- 05 1-H 

Tji'o'oo oToT 
M Tfi CO to C^J 
OC 1 -H 1 -H ^ O 

^OOCO 
CO to CO 

1 -H «0 




3^ 

o 


ftS-S-d 

: fl § g 

OT ^ 3 ..H ‘k d 

2 ot 3 © do 

^ .S3 03 

o'3 c3 fci O 
^ dftfte-tH 

CO o 

.a g 

f^^ai 


% 

_d 

"o 

*3 

d 

o 

o 


Mot® 

ce 


dS 

■3-1 

3§'d- 


^ P '3 
P 35 «i 2 

<4^ 4 


>> 


1 IJ ■ 

^ a 3 2 

•p 3 o3 d 

fd P b. © 




S-- 


o 

E-( 


© 

d 


CO 

a 

o 


a 


eJ 

Ph 


'3 

d 

© 


© 

ft 

3 

CO 

d 

o 


'3 

>> 

d 

■3 


.a 


.3 3 
© 
CO M 
© d 
d to 
O 

ftd 

30 

3d 

© fe 
CO 

3. 

d 


d 


2=3 

a © 
g3 
d. =3 
« d 

3^ 

.bl 


.©.s 


°.a 

d3 

fcx) © 

I’S 

P rt 


155 

•a .si 


o 4.^ C\> V 

«« © 3 M O 

.sill'll" 

'3.« 3 ri *3 3 ^ 
© © w.a © d3 
,3 '^ © 


M 


b 


d d 
o © 

a 

O Q, 

ft.» 
•” d 
o o’ 

coW 
© 

txip 

2b®'i i&d « O 

soao2g33®-3 

«3 ” ©^ O 3 a O O ° 

■S^+jPaOdd o d" a 
d ® a © ® d od 

^ © © d.2-^dt>>3ds© 

3 "d 12 dJ-d OT o d pdfe 
a ft,^ dpft”^_?5op'^ 

i3^2aft2 •''d'^,a,3© 

■ss2tt!'2ll:isss§3 

Iasi'S ml ■sis» 



d|:Sdo||ftgM|i'| 

SM^ig'a’a«ag.°|^g 

|■|iS|§ia■3»l|fg 

d.;i,l-i<«&®gu'5 03^®0 

E-i o Ph -d ..ft CQ oo'E-' .2 d ^ 

.. cOMm3»ioier.3©««> 

2 s a 2 

©a 3 © 

d d 


d ft 






























































































Brief Series No. 5 (Table 5, re'vdsed). —Showing the apportionment of expenditures for railroad transportation for the fiscal year 1908 to each 
class of mail matter and to the registry service, based upon the weight and average haul of the mail, equipment, and empty equipment. {Revised 
on basis of Table 4, revised.) 

(Substituted Sept. 13,1911, by letter, for table submitted to the Commission Aug. 25,1911, typewritten record, p. 2100, and Exhibit 201, pp. 8 and 9.] 


36 


KEPORT OF COMMISSION ON SECOND-CLASS MATTER. 


CO 


111 si- 


O w 

S ^ H O 


OQ Ti 
C> M 

o - 




o d CO 

±5 e til'd 
rd B <» 

«>'d+j o 

ft 


3-: 

S'S 


o* 

ft 


$ C« 

“c3 O 05 
<-^.d g 


•rH M 

^ a 


o 

CO 


. CM 
CO lO 

o 

CO 


O) 


o 


^ o 

r 




S oo" 
o o 
ft irl' 


13 

Expendi¬ 

tures for rail¬ 
road transpor¬ 
tation appor¬ 
tioned to 
each class 

and service 

named. 

$8,348,851.84 

21,102,320.65 

8,853.50 

761,401.12 

287,738.80 

22,160,314.07 

7,861,909.27 

1,907,929.56 

274,458.54 

2,337,324.38 

1,164,235.44 

212,484.03 

12 

Per 

cent. 

18.86 

47.67 

.02 

1.72 

.65 

O cOi-H CM X X Op 

O !>• X CO CM CO 

o ^ ’ »0 CM * 

iO 1-H 

11 

Total pound- 
miles mail, 
equipment, 
and empty 
equipment. 

180,885,390,135 

457,170,939,587 

191,050,594 

16,513,978,120 

6.269,936,221 

480,145,904,522 

170,276,786,146 

41,300,418,679 

5,960,113,567 

50,619,968,025 ! 

1 

! 

25,250.873,284 

i 4,607; 378,698 

10 

Pound-miles 
for empty 
equipment. 

11,835,639,992 

3,269,539,802 

2,328,445 
103,347,432 
32,883,148 

3,408,098,827 

5,606,603,030 

265,415,216 

256,019,932 

2,003,532,722 

595,989,152 

404,770,522 


CO CO 


o o o o 
^ ^ 

CO CO CO CO 


CO CD 
CO CO 


lO CM 00 
COO CO 
CO :0 O 

cTccTirr 

CO Oi 
CO CM 


cO CM CO 

05 lO 

O CM O 

oTvo'^-^' 

GO 05 05 

I>r-I 

ooi-T^ 

1—I CO 05 
05 CM 


CM CO CM 
O lO 05 »o 
05 O O 05 lO 

4r5''^*'l^05''cr 

r^oocoo5 

^CMt>-t>-C^ 


CM 05 
CM O 

I—I 


COOCO^O^O 
CO 00 05 CO CO 
o O T-i Tt< 

cD'oToTt^cf 

CO O 05 CO CO 
05 05 O t—l CO 

'^‘'oTtCoTco 


CM CO 
05 

CM 1-t 

O 00 
O Q 
fH O 

oo 

CO CM 


rH 

o o 




00 CM CO 
05 lO 

COTf o 

rHOOOO 
^ 05 CM 
CO CO t>- 


00 O CO lO »o 
CO 00 05 CO CO 

lO ^ ^ 


CM 00 
05 CO 
1-H 

CO oT 
lO 00 
CM 


CO b* CO o 
Tj< 05 O 05 »-t 

oo 00 fcjQ CO O 
oTcTcM^irrcM' 

iO CO CO CO 
05 05 CM 00 CO 

ocToTo ootjT 
CO 

00 OOrH 05 


05 O O O 00 
lO CO O CO 
CO O fcO 00 

oT eo'co' cm' 

CO O to J> 
00 CM 05 05 


40 CM 00 CO O 
T-i CO CO 
^ 1-H 


o 

s 




CMCOt>OOrH 
O 05 00 

CO X CO X 


•CMt^OCM 
* t>» X lO X 
icocot^t>* 


o 

CM 

CO 


05 
. ^ 

,2^ 
^ CM 

O -V 


X05 05CM 
CM X CM O 40 
O 05 O 00 

CO r-rGcTc^tC 
tN. 40 1-H X rp 
40 O X 1-H 


S X O CM 05 05 
X 1 -H rt< o X 
XCMt>*05 05t^ 


10XC0*M<XX 
'^coto X,^ 


O CM 
CMX 

f-H 


1 

2 


§5 

O ^ »—1 ^ ' (.Vj 

•• ftg'S'^ 

OT O d — S 03 

50 +J rQ d il <11 S 

w c3 d 03 .a "s; 9 

o'd ‘3 - ^ 

dPn 
OT O 

El 


” ' OT 

S 

Or 


r1 ^ 

p ^ 
.Sf-g 
£•5) 

o ^ 
ftft 


o 

ft 


1$ 


a ft 

Iq -B-a 

d <11 s « 

•n OT cr 03 

xa d „ 

.sfo ® a 

mS p 



co^ 


.S'- 


03 O 


►. Q'd fto H 

S O .d <11 

<D ftd-s S S 

^tct: g.Ac; « « 
s.agf 

C3 *-^ ^ 4t»i 

o ® (fl o o 

ft^ ® dad-S—— 

d^-d ® d 2 2 9 

w-fr30*t?C3®wC3 

'g.2.d oS--.dJd 
2 'S -id Pj o ® ® 


Z.23 


























































REPOBT OF COMMISSION ON SECOND-CLASS MATTEK. 37 

We may first examine the computation of weight of mail and equip¬ 
ment as shown in these revised tables. 

Weight of mails transported by railroad. 

To ascertain the weight of domestic mail transported by railroad, 
the department deducted from the estimated weight for the year, 
based on the six months’ weighing, the estimated weight of local- 
delivery mail, and the result is set forth in the amounts appearing 
in Table 4, revised, column 2, which are carried forward into Table 
5, revised, column 2.’ In the case of foreign mail, one-third was 
treated as not receiving railroad transportation, this being the opin¬ 
ion, it is said, of experienced postal officials.^ 

It has already been observed that in the case of second-class mat¬ 
ter paid at the pound rate, the estimate for the fiscal year 1908 was 
in excess of the actual amount by about 9,000,000 pounds (or about 
per cent), due to the fact that the estimate was made on the show¬ 
ing of the six months’ weight. This excess, less the proportionate 
deduction for local delivery, was carried into the above tables; but 
the weights for the year were calculated upon the same basis for all 
classes of mail and, for the reasons already stated, the proportions 
thus established may be taken for the purposes of this computation.^ 

The amounts deducted for local delivery (with the exception of 
free-in-county matter) were ascertained from the thirty days’ weigh¬ 
ing from October 1 to 30, 1907, in 790 representative post offices.^ 
That is to say, there was deducted from the estimated weight for the 
year the same percentage for local delivery as was shown during the 
thirty days. In this way, in the case of second-class mail, deduction 
was made from paid-at-the-pound-rate matter (subscribers’ and 
sample copies) and from transient matter, as the amount of local 
delivery of each was reported in the thirty days’ record. 

But, as to free-in-county matter, there was no such report, and in 
the table first submitted by the department suitable deduction was 
not made in this case for local delivery.® Accordingly, the depart¬ 
ment sent telegrams to a few post offices asking what percentage of 
free-in-county matter was dispatched on railroads. Nine answers 
were received, as follows: ® “ Maquoketa, Iowa, 30 per cent; Crisfield, 
Md., 35 per cent; Hastings, Minn., 36 per cent; Berea, Ohio, 50 per 
cent; Pulaski, Tenn., 40 per cent; Clay Center, Neb., 62 per cent; 
Hinton, W. Ya., 49 per cent; Eldorado, Ark., 54 per cent; Williams- 

1 Supra, pp. 35, 36. 

2 Statement of Second Assistant Postmaster General, Exhibit 200, p. 23. 

« Supra, pp. 24, 25. 

* Report of Weighings of 1907. H. Doc. No. 910, 60th Cong., 1st sess.. Table DD. 

B Exhibit 200, Table 4, p. 25, Typewritten Record, p. 1800. 

® Typewritten Record, pp. 1802-1804. 



38 


EEPORT OF COMMISSIOISr ON SECOND-CLASS MATTER. 


port, Pa., 58 per cent.” From this it was assumed that the average 
amount carried on railroads was 46 per cent, and that the remainder, 
54 per cent, was local delivery. 

The calculations of the department appear in the following table,^ 
in the first column of which are stated the estimated weights of mail 
for the year (except foreign mail), as they are found in Table 3,^ 
and in the last column are the weights used in revised Tables 4 and 5 ® 
as having railroad haul. 


“ Computation of weights of mail having railroad haul. 


Class. 


First. 

Second: 

Subscribers... 

Samj)les. 

Free in county, 

Transient. 

Third. 

Fourth. 

Franked. 

Penalty. 

Foreign. 


Total weight. 

Local 

delivery. 

Weight local 
delivery. 

Net weight 
having rail¬ 
road haul. 

Pounds. 

Per cent. 

Pounds. 

Pounds. 

157,502,610 

24.94 

39,281,151 

118,221,459 

679,048,950 

1.69 

11,475,927 

>667,573,023 

25,167,258 

.46 

115,769 

25,051,489 

*52,867,236 

54.00 

28,548,307 

24,318,929 

24,437,454 

9.43 

2,304,452 

22,133,002 

179,694,654 

6.43 

11,554,366 

168,140,288 

58,889,400 

4.62 

2,720,690 

56,168,710 

4,531,080 

1.57 

71,138 

4,459,942 

43,092,474 

3 54,067,099 

10.56 

4,550,565 

38,541,909 

<36,044,732 


[1 Inaccurately stated in original as 657,573,023.] 

2 52,867,236 pounds less 54 per cent not having railroad haul; this per cent based on reports from post 
offices. 

3 60,814,956 pounds less 6,747,857 pounds to Canada. 

* Two-thirds of foreign receiving railroad haul.” 


The deductions for local delivery, by taking the percentages found 
during the thirty days, are criticized; and it is said that the amount 
of local delivery mail of each class for the thirty days, extended to 
one year by dividing by 30 and multiplying the quotient by 366, 
should have been treated as 85 per cent of the whole amount of local 
delivery matter upon the ground that the mail in 790 selected post 
offices is stated by the department to represent approximately 85 per 
cent of the entire weight of all mail originating in the United States.^ 
Thus, by way of illustration, it is calculated that the amount of local- 
delivery mail of the first class, being 1,974,892 pounds for the thirty 
days, if extended to a year would be 24,093,670 pounds and, raised 
from 85 per cent to 100 per cent, would give 28,345,494 pounds to be 
deducted from the weight of first-class matter; whereas the depart¬ 
ment on its method had deducted 39,281,151 pounds, an excess, it is 
urged, to the prejudice of second-class matter. The fallacy lies in the 
assumption that the weight of first-class mail in the selected offices 
was 85 per cent of the total weight of that class; and the same argu- 


1 Exhibit 98. 

2 Supra, p. 23. 

8 Supra, pp. 35, 36. But see as to penalty matter. Table 4 revised, note 6, and Table 5 
revised, note 4. 

* Report of Weighings of 1907, H. Doc. No. 910, 60tb Cong., 1st sess., pp. 13, 14. 
























REPORT OP COMMISSION ON SECOND-CLASS MATTER. 39 

ment which advances these criticisms contends, on a tabulated com¬ 
parison, that the weight in the selected offices was only about 62 per 
cent of the entire weight of first-class mail, and in the case of second- 
class mail was about 93 per cent. 

We are also of opinion, having in view the necessity—to which we 
shall presently advert—of making a selection of offices for the pur¬ 
poses of calculating average haul, that the offices actually selected 
should be regarded, in the light of their number and character, as 
sufficiently representative to afford a basis for practical judgment. 

In regard to free-in-county matter, however, the replies from the 
offices above mentioned are too few to furnish an adequate basis for 
a proper estimate as to the amount of free-in-county matter having 
railroad haul. The total estimated weight of free-in-county matter 
for the year was 52,867,236 pounds (an excess over the amount 
shown by the annual report of 1,165,959 pounds^), and in Table 5 
the average haul is stated at 7 miles, so that the share of trans¬ 
portation expense on the assumption of 24,318,929 pounds carried 
on railroads, with the amount of equipment stated, is only two- 
hundredths of 1 per cent.2 It is obvious, therefore, that a mistake 
in the estimate, if any, would play an insignificant part in the 
division of the cost of railroad transportation.® 

Weight of equipment transported by railroad.—A more serious dif¬ 
ficulty is presented in the endeavor to ascertain the weight of equip¬ 
ment and of empty equipment hauled on railroads, and the amount 
of each which should be attributed to each class of mail. It is said 
that it was impracticable to take the weight of equipment separately 
as to each class of mail and that the respective amounts had to be 
calculated from the whole weight. 

The equipment was weighed during the weighing period of six 
months under ‘‘ General Letter of Instruction C,” dated July 19, 
1907 (amplifying earlier instructions), as follows: 

It is important to ascertain the weight of equipment divided into two 
classes: First, that which is dispatched containing the mails originating at 
post oflSces, and, second, that which is dispatched empty. Therefore you are 
instructed to weigh or estimate the weights of equipment dispatched from 
your office, keeping the weights and records of the two classes separate. The 
first class will include only that equipment which is used by you in dispatching 
mails originating at your office. It is the equipment necessary to inclose and 
handle these mails. It does not include equipment that comes to your office 
or passes through your office in transit containing mail. The second class 
includes all empty equipment dispatched from your office for any purpose or 
to any place. You will note that you are to weigh or estimate the weight 


1 Annual Report, 1908, p. 279. 

2 Supra, p. 36. Table 5 revised, column 12. 

»It may be contended that the free-in-county matter is carried in larger proportion 
than other mail on the smaller and higher paid routes, but as to this we have no data, 
* Report of Weighings, 1907, H. Doc. No. 910, 60th Cong., 1st sess. 



40 


REPOET OP COMMISSION ON SECOND-CLASS MATTER. 


of only equipment dispatched; therefore you should not weigh equipment that 
comes to your office with mail from another office or that passes through your 
office in transit, as it will have been weighed by the office of its dispatch. If, 
however, for the purposes of separation or otherwise handling mails in transit 
it becomes necessai* *y for you to use additional equipment, other than that 
which comes into your office with the mails in transit, for the purpose of 
dispatching the mails properly, you should weigh such additional equipment, 
as its use originates at your office. 

Accordingly, while the mails were weighed only once, the equip¬ 
ment as it was reused in dispatching mails originating at post offices 
would be reweighed. In this weighing and reweighing of equip¬ 
ment no distinction was made between the different classes of mail 
in connection with which the equipment was used. And on the 
evidence before us we do not think it can properly be said that this 
manner of taking the weight of equipment operated to the dis¬ 
advantage of second-class matter. 

The apportionment made by the department, while in part resting 
upon the results of the special weighings, also involves estimates de¬ 
rived from general observation and experience. 

The total estimated weight of equipment for the year, based on the 
six months’ weighings (domestic mail), is 930,757,032 pounds.^ 
From this there were first deducted 107,110,998 pounds, the esti¬ 
mated weight of empty equipment for the year, also based on the 
six months’ record.^ And from the remainder (823,646,034 pounds) 
there was taken the weight of equipment for the year which was 
regarded as attributable to steamboat, special, rural delivery, star- 
route, local delivery, and registry services. Originally the estimated 
equipment in the mail messenger service was also deducted, but this 
deduction was admitted to be erroneous, as all the equipment on that 
service is transported on railroads.® 

The deductions for these various services (except local delivery 
and registry) were obtained by a departmental estimate of “ the 
number of trips made yearly and the average weight of equipment 
used per trip, based on the average weight of pouches and sacks.” ^ 

The amount of local delivery equipment was reached by deducting 
from the total estimated weight for the year that percentage which 
was shown for local delivery during the thirty days’ weighing in Oc¬ 
tober, 1907.® 

The weight of equipment carried in the registry service was esti¬ 
mated “ on the basis of the daily exchanges of pouches and sacks and 


1 Table 3, supra, p. 23. 

2 Report of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess. Table I, p. 23. 

■Typewritten Record, pp. 1892, 2101. 

* Exhibit 200, p. 23. It may be that a small part of the equipment above deducted was 
actually carried on railroads, but it is insisted by the department that such an amount 
would be so small as to be negligible and would probably not affect any of the percent¬ 
ages given in the tables relating to transportation cost. (Typewritten Record, pp. 1887 
1894-1896, 1899.) 

■ Exhibit 200, p. 23 ; Exhibit 97. 



REPORT OP COMMISSION ON SECOND-CLASS MATTER. 41 


their average weights.” ^ This amount (8,289,168 pounds) was dealt 
with separately in the transportation tables.^ 

The summary of the calculation, as it was submitted by the de¬ 
partment (before the correction was made as to mail messenger 
equipment) is: ® 

“ Equipment deducted. 


Pounds. 

“ Steamboat service_ 1,346,319 

Special service_ 2,365,440 

Rural delivery service_ 18,040,656 

Mail messenger service_ 59,636, 200 

Star route service_ 89,069,760 

Local delivery- 156, 245, 652 

Registry service_ 8,289,168 


Total equipment_ 930, 757,032 

107,110,998 


334,993,195 pounds. 


Less. 


823, 646, 034 
334, 993,195 


488, 652, 839 Equipment transported on railroads. 
Less registry_ 8, 289,168 

480, 363,671 Equipment less registry.” 

There should be added the mail messenger equipment, as follows: 


Pounds. 

Total as shown above- 480,363, 671 

Mail messenger equipment (deducted in error)- 59,636,200 


539, 999, 871 

This is the total domestic equipment, less registry, given in Table 
4, revised, column 9,^ as transported on railroads in connection with 
the mails. But it will be observed that the registry equipment, in 
the foregoing calculation, is deducted twice.® Making the needed 
correction, the total domestic equipment so transported, less registry, 
would be 548,289,039 pounds. 

In order to apportion this total weight of equipment (as it appears 
in the tablp) among the different classes of mail, it was first divided 
between pouches and sacks. The sack equipment was estimated and 
the remainder was treated as pouch equipment. The following is 
the method of computation: 

All mail of the second and fourth classes is carried in sacks, and 
that of the first class in pouches. It was estimated that 70 per cent 
of third class, 45 per cent of congressional (franked), and 35 per 
cent of departmental (penalty) were transported in sacks, and the 
residue in each case in pouches. These percentages are said to have 


1 Exhibit 200, p. 24 ; Exhibit 97. 

» Supra, pp. 35, 36. Table 4 revised, column 9; Table 5 revised, column 6. 

« Exhibit 97. 

* Exhibit 97. It was deducted only once in the estimate first made. Exhibit 200, 
pp. 23, 24. 






















42 REPOKT OF COMMISSION ON SECOND-CLASS MATTER. 

been based ‘‘upon estimates submitted by division superintendents, 
Railway Mail Service, from tests made on the basis of weights and 
pieces, from which a complete estimate was made.” ^ The number of 
pounds in sacks and in pouches of each class of mail, and the per¬ 
centage for each class of the whole weight of mail transported in each 
sort of equipment, were computed accordingly. The results are- 
stated in Table 4, revised, column 4. 

The weights of the different classes carried in sacks having been 
ascertained, the number of pieces in sacks were calculated by using 
the ratios found during the seven days’ count, October 12 to 19, 1907.^ 
These ratios are given in column 5, and the number of pieces in sacks 
in column 6, of Table 4, revised. 

From general experience, it has long been assumed in the depart¬ 
ment that there are 150 pieces to a sack. Hence the total number of 
pieces in sacks were divided by 150 and the quotient was multiplied 
by 55 ounces (the weight of the sack), in order to obtain the total 
Aveight of sack equipment. This amounted to 101,202,210 pounds.^ 
This total was divided among the several classes of mail carried in 
sacks according to the percentage of the weight of each class so 
carried.^ 

The total weight of sack equipment was then deducted from the 
total weight of equipment (less registry) which had been found to 
be transported on railroads in connection with the domestic mails 
(589,999,871 pounds), and the remainder (438,797,661 pounds) was 
treated as the weight of pouch equipment. This was divided accord¬ 
ing to the weight of the several classes carried in pouches.® And 
where a class of mail was carried partly in pouches and partly in 
sacks the two were added together to give the total weight of equip¬ 
ment for such classes.® 

With respect to empty equipment: From the total estimated weight 
for the year, based upon the six months’ weighings, that is, 107- 


^ Supra, p. 35, Table 4, revised, column 3, note 1. 

2 Report of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess. Table Y, p. 33. 

3 Table 4, revised, column 7, note 7. 

<^See Table 4, revised, column 4; the results are set forth in Table 4, revised, col¬ 
umn 7. In an intermediate calculation which was substituted for original Table 4, It 
was assumed that there were 52.14 pieces to the sack, and the result was that the 
weight of sack equipment for second-class matter was raised from 84,862,824 pounds (as 
it was stated in the original table, Exhibit 200, p. 25) to 230,085,182 pounds (Table 4a, 
Typewritten Record, pp. 1582-1586). It appeared that the ratio of 52.14 had been 
derived from a count kept in the railway mail service in November, 1910, but in this 
count each bundle of pieces was taken as one piece, while the total number of pieces 
shown in Table 4 was computed on the basis of Individual pieces, and to ascertain 
the number of sacks the divisor should be the average number of individual pieces to a 
sack. This calculation (Table 4a, Typewritten Record, pp. 1902-1909, 1911) was there¬ 
fore withdrawn and Table 4, revised, was introduced in its place. 

® Table 4, revised, column 8. 

® Table 4, revised, column 9. 




REPORT OF COMMISSION ON SECOND-CLASS MATTER. 43 

110,998 pounds,^ there was taken the percentage for local delivery 
shown by the thirty days’ weight in October, 1907.^ The remainder 
was treated as transported on railroads and was divided among the 
different classes of mail according to the percentage of the total 
weight of equipment, used in connection with the mails, which had 
been attributed to each class.-"^ 

Additions to the total weight of used equipment and empty equip¬ 
ment, respectively, were made for registry and foreign services.^ 

In this way, the basis was obtained for the computation of pound- 
miles. 

Objection has been made to the method of apportioning the total 
weight of sack equipment among the several classes of mail. As this 
total weight was found by ascertaining the number of sacks from 
the total number of pieces in sacks, according to the assumed number 
in each sack, it is contended that the same method should have been 
used in determining the weight of sack equipment for each class. 
While the total weight of sack equipment, for all classes combined, 
would be the same, this calculation would give different proportions 
for the several classes. Thus, the weight of rack equipment used in 
connection with the transportation of second-class matter would be 
72,620,314 pounds, instead of 80,961,768® pounds. It is urged by the 
department, on the other hand, that there are more likely to be on 
the average the same number of pounds than the same number of 
pieces to a sack where the weight of the pieces differs, as it does 
with respect to the different classes of mail carried in sacks. But in 
order to give the benefit of the doubt to second-class matter, where 
doubt arises, we shall use in the computation of the cost of transpor¬ 
tation the lower of the two amounts shown in the following statement: 


Items. 

Weight of 
sack equip¬ 
ment. Table 
4, revised, 
column 7. 

Weight of 
sack equip¬ 
ment appor¬ 
tioned to each 
class on basis 
of 150 pieces 
to sack. 

CLASS OF MAIL. 

First class..... 

Pounds. 

Pounds. 

Second class: 

Pf^id pnnnd ratp. ...... 

75,193,242 

2,641,378 

2,398,493 

728,656 

66,982,561.8 

3.845.430.6 

1.486.138.6 
306,183.9 

Free in county. 

Transient. 

To Canada. 

1] jappnnd pla.as ... 

80,961,768 
12,771,719 
6,102,493 
222,645 
1,143,585 

■ 72,620,314.9 
23,088,463.2 
4,067,550.3 
91,525.6 
1,334,356.1 

Third class... 

Fourth class........ 

Franked....-...-..— - - 

Penalty. 

Tnta.1 . 

101,202,210 

101,202,210 



1 Supra, p. 40; Report of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., 
Table I, p. 23. 

2 Id., Table DD; Typewritten Record, p. 1879. 

3 Table 4, revised, column 11. 

* Id., columns 9, 11. 

6 Id., column 7. 




















44 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


Again, as we have seen, the correction of the error due to the double 
deduction of registry equipment makes the total weight (less regis¬ 
try) used in railroad transportation in connection with the domestic 
mails 548,289,039 pounds;^ and on this basis, after deducting the 
total Aveight of sack equipment, there would be left for pouch equip¬ 
ment 447,086,829. Making this change, and taking the lower amount for 
the sack equipment of second-class matter obtained by the calculation 
on the basis of number of pieces, we should have different percentages 
for the several classes of mail of the total weight of equipment. 
Thus, the percentage for second-class matter, instead of being 14.99 
per cent,2 would be approximately 13.25 per cent, and the weight of 
empty equipment attributable to second-class matter, accordingly, 
would be 8,994,710 pounds, instead of 10,175,902 pounds.^ 

These changes, hoAvever, manifestly have a very slight effect upon 
the apportionment of expense of railroad transportation.^ 

More fundamental is the criticism that in this computation of 
the weight of equipment we are dealing in large measure with gen¬ 
eral estimates which do not rest on the special weighings but on the 
credit to be accorded to departmental opinion. Thus, with respect 
to the deductions for equipment not used on railroads, the percent¬ 
ages assigned to sack equipment in the case of third class, fourth 
class, franked and penalty matter, and the number of pieces to a sack, 
we have no adequate primary data on which to base a calculation of 
averages. We are not impressed with the argument that because of 
the corrections and recalculations found to be necessary in the course 
of this inquiry, the judgment of the department should be ignored. 
These revisions are to be considered in the light of the extreme diffi¬ 
culty of the problem and the complexities of the computations. The 
general estimates to which we have referred can not be said to be 
disproved; they are derived from long experience in the service 
and, in the absence of proof of substantial inaccuracy, they may not 
be brushed aside. 

It is important also to understand the consequences of error in 
these estimates, if error there be. The cost of railroad transporta¬ 
tion is divided in the department’s table on the basis of pound-miles 
and the total pound-miles for mails, equipment and empty equip¬ 
ment are over 959,000,000,000.® Now, the number of pound-miles 
entering into this total, which are based on the haul of equipment 
and empty equipment attributed to second-class mail, is less than 
35,000,000,000.® If all this equipment and empty equipment were 
assigned to other classes of mail, and none whatever to second-class 


1 Supra, p. 41. 

2 Supra, p. 36. Table 4, revised, column 10. 

« Supra, p. 36. Table 4, revised, column 11. 

* Infra, p. 52. 

8 Supra, p. 36. Table 5, revised, column 11. 

* Supra, p. 36. Table 5, revised, columns 7 and 10. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


45 


mail, the latter would still have over 46 per cent, instead of 50.06 per 
cent, of the total pound-miles stated. Second-class mail, according 
to the six months’ weighing, constitutes over 60 per cent of the total 
mail. Under the department’s calculation, the percentage of equip¬ 
ment and empty equipment attributed to it is less than 15 per cent 
(or 13.25 per cent with the changes above suggested) of the whole 
equipment (less registry) carried on railroads in connection with 
domestic mails.^ There is no basis for concluding that corrections in 
the general estimates which the department has used would reduce in 
any important degree the share of second-class mail of the expense 
of railroad transportation. 

Average haul.—The average haul stated in Table 5, revised,^ was 
taken from the report of special weighings in 790 representative 
post offices for thirty days from October 1 to 30,1907.® 

The method of calculation is thus set forth in the report of the 
departmental committee which supervised the weighings:^ 

“ It was wholly impracticable to secure data showing the weights of the mails 
dispatched to each oflBce of destination or to compute the average hauls for 
such a large number of representative offices upon such elaborate and volumi¬ 
nous data. The instructions therefore required the report of weights of mails 
by classes and subclasses dispatched to the several States and Territories of 
destination, and in computing the average hauls the distances used as multi¬ 
pliers in the several instances were the ascertained distances between the 
offices of origination of the mails and the postal point nearest the center of 
population of each State and Territory, respectively, or to the point of exit 
from the United States of the mails destined for Porto Rico, Canal Zone, 
Panama, Philippine Islands, etc., and to Canada, Cuba, and Mexico, by the 
shortest practicable mail route. Such distance was ascertained in every case 
and applied to the weights carried to such State or Territory in making the 
computation of the average haul. The average hauls were ascertained by the 
accepted manner of computation; that is, for each class or subclass a multipli¬ 
cation of the weight of mail matter by the distance from the office of origi¬ 
nation to the point nearest the center of population in the State of destination, 
producing pound-miles. The addition of the pound-miles was made for all 
dispatches to all the States and Territories and the division of the sum by the 
total weight of mails dispatched, producing the average haul. The total 
weights of all mails of the several classes and subclasses were used for the 
purpose of ascertaining these average hauls, respectively, with the exception 
of mails for local delivery, which were not regarded as having hauls within 
the meaning of the statute.® 

“ The average hauls of equipment were computed from reports of weights of 
equipment dispatched to the several States, to cities, and to railway post-offices. 
Postmasters were instructed to report weights of equipment dispatched to 

1 Table 4, revised, column 10, supra, p. 35. 

2 Supra, p. 36. 

3 Report of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess. Tables AA, 

CC, and DD, pp. 36-58. 

^ Id., pp. 14, 15. 

“3 In the above-described compensation (sic), the distance applied to the mails dis¬ 
patched to points in the State or Territory of origin was determined in each case by a 
careful estimate based upon the area of the respective State or Territory.” 




46 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


States and Territories, as sent to such States and to the States in which such 
cities were located, and to report equipment dispatched to railway post-offices, 
as sent to the State in which such equipment was opened for the distribution 
of the mail contained therein by the railway mail service. As equipment is 
often changed with reference to any volume of mail an accurate ascertainment 
of an average haul is hardly practicable, and this method of stating points of 
destination appears to approximate accuracy as near as possible. 

“The computation of an accurate average haul of second-class matter, free in 
county, is impossible without reports showing the actual destination within the 
county of all such matter. As a computation based upon such elaborate and 
voluminous data, even if it could be obtained, was impracticable, it was decided 
to assign as the average haul for such matter a mathematical average for 
travel within the county. To ascertain this for any one State, the total area 
of the State was divided by the number of counties in the State, thus giving 
the average area of a county. For the purpose of ascertaining the average 
dimensions of a county, it was assumed to be approximately square. There¬ 
fore the square root of its area would represent its length or breadth. This 
was ascertained. This factor was doubled to represent the length and breadth 
and one-eighth of the same was taken to represent the mathematical average 
haul.” 

That this method was a proper one, sufficiently appears from the 
following statement of the public accountants who, under the author¬ 
ity of the Joint Commission of Congress, conducted the inquiry into 
the business methods of the department. The statement appears in 
their description of the cost system proposed: ^ 

“ The average haul of each class of mail is necessary in order lo compute the 
ton-miles which form the basis of distribution of the cost of transportation. 

“It is self-evident that insuperable difficulties stand in the way.of obtain¬ 
ing over any prolonged period a record of the actual distance traveled by the 
individual pieces of mail of each class, and the nearest approach that can, in 
practice, be made to obtaining the actual haul is by a test or series of tests for 
some comparatively short period of the weight of mail in classes dispatched 
from the post-office of origin to the State of destination, an average distance 
being estimated for its travel in the latter. 

“As explained under the caption “Weight,” the difficulty of holding up the 
mail for a sufficient length of time at the separation case to enable the con¬ 
tinuous weights to be taken separately for each State or town of destination 
is in itself a serious one, owing to the delay caused to the mail, apart from the 
labor of tabulating the numerous-weighings. Having obtained these weights, 
the next step would be to calculate and enter on the tabulation sheets the 
distances from the post-office to each State or town of destination by the 
nearest mail route, the geographical distance not giving the true line of travel. 
When it is remembered that there are over 60,000 post-offices in the United 
States, some idea can be gained of the millions of calculations involved in 
these two processes and in the subsequent work of multiplying the weights by 
the distances and dividing the products by the total weight, to arrive at the 
average haul. Under the circumstances it seems necessary to confine the taking 
of the average haul to a selected number of representative post-offices. 

“ In the weighing now in progress the haul is being calculated on the basis 
of the distance from the point o f origin to the center of population in the 

^ S. Kept. No. 201, 60tli Cong., 1st sess., p. 93. See also Typewritten Record, pp. 972—974. 





KEPOKT OF COMMISSION ON SECOND-CLASS MATTER. 47 

State, as furnished by the Census Bureau, and this method is probably as fair 
as could be adopted without a very great amount of additional labor.” 

The calculation is criticized upon the ground that the month 
selected was not fairly representative. It is said that in October the 
magazines are heavier than the average for the year as they carry 
the advertising matter for the Christmas sales; and that as the aver¬ 
age haul for magazines is longer than for other pound-rate matter, 
the average haul attributed to all pound-rate matter was thus unduly 
increased. 

The special records of 1907 do not give the weights of newspapers, 
magazines and other periodicals, separately, either for the thirty days 
or for the six months. And as the thirty days’ weighings were had 
in only 790 post offices and the six months’ weighings were had in all 
offices, we can not compare satisfactorily the totals of pound-rate 
mail, or of all second-class mail, even if the thirty days’ weights are 
extended to six months. A comparison of weights in particular post 
offices—^those, for example, in the principal offices where it is said 
the magazines are mailed in the greatest number and weights, e. g., 
New York, Chicago, Philadelphia and St. Louis—does show that the 
weight of second-class mail estimated for six months on the basis 
of the thirty days’ record is greater than the amount shown by the 
six months’ weighing.^ This comparison also shows an increase, in 
the great cities, in mail other than second-class; and it might be 
expected that this, too, would reflect the activities of the autumn 
season. But it does not appear that there were like ratios of increase. 

In considering statistics of this sort it is important to note the 
precise question presented. The two factors in the computation of 
pound-miles are weight and haul. Now, the weights which were 
used in computing the pound-miles shown in Table 5, revised, were 
based on the six months’ weighing—after the deductions for local 
delivery in the manner already described—and not on the thirty days’ 
weighing. And, as we have said, there is nothing before us which 
would justify the conclusion that the relation between these weights 
of the several classes of mail was not established with substantial 
accuracy. YTien we come to the matter of haul, the mere fact that 
pound-rate mail, or any other sort for which an average haul was 
computed, was heavier during the thirty days would not necessarily 
affect the result, for the average distance of transportation might still 

1 In the argument submitted by the publishers, the calculation erroneously increases 
this result by dividing the weight for thirty days, brought up to six months, by 85 per 
cent on the assumption that this weight is 85 per cent of the whole weight. But the com¬ 
parison is between particular post offices and not between the 790 offices and all offices. 
Even in the latter case, it would be inaccurate to assume that the weight either of first- 
class matter or of second-class matter, taken separately, was 85 per cent of the whole 
weight of that class. (Supra, p. 38.) (Memorandum filed on Behalf of the Publishers 
of Certain Magazines, pp. 38, 39.) 



48 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


be the same. So also the average haul was calculated for each class 
and subclass (mentioned in the department’s table) separately and 
these average distances might remain the same, although at a given 
time the volume of one class was enlarged or reduced as compared 
with another. It follows that the showing that second-class mail 
formed a greater percentage of all mail during the thirty days than 
for the six months does not establish that the average hauls of the two 
classes, respectively, as computed for the former period, would not 
be the same during the latter. The question would be whether during 
the thirty days there was such an abnormal relation between the por¬ 
tions of mail composing a class or subclass as to make an appreciable 
difference, with respect to the entire country, in the average haul to 
be assigned to the whole class or subclass. And it is the contention 
that there was at this time such an abnormal relation between maga¬ 
zines and other second-class mail paid at the pound rate; but this 
can not be regarded as proved by any of the calculations which have 
been submitted comparing the thirty days and six months’ records. 

Apart from this, an inquiry whether the average hauls for October, 
1907, should be treated as representative must take into account the 
returns from the special weighings in the year 1906. These were re¬ 
ceived from 427 post offices, representing over 90 per cent of the total 
weight of second-class mail paid at the pound-rate and free-in-county.^ 
The average haul was computed for the paid-at-the-pound-rate matter, 
after deducting the portion returned as local delivery or without 
giving the State of destination; ^ and the calculation covered the en¬ 
tire half year (July 1 to December 31). The average haul of the 
various subclasses, as described in the statute authorizing the weigh¬ 
ings, and of all subclasses combined, were found to be as follows: ^ 


Average 

haul. 


“ Daily newspapers: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined 
** Weekly and other than daily newspapers: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined. 
Scientific periodicals: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined. 
“Educational periodicals: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined, 
“ Religious periodicals: 

Subscribers’ copies. 

Sample copies.. 

Subscribers’ copies and sample copies combined. 


Miles. 
255.41 
315.25 
255.75 


489.89 
495.99 
490.13 

793.82 
790.21 
793.62 

641.91 
706.29 

644.27 

598.38 

666.47 

599.27 


1 Annual Report, 1907, p. 46; Report of Weighings of 1906, H. Doc. No. 651, 59th Cone. 

2d sess.. Table C, p. 21. * e. • 

2 Report of Weighings of 1906, p. 5. 

»Id., p. 21. 






















REPORT OF COMMISSIOIT ON SECOND-CLASS MATTER. 


49 


Trade-journal periodicals: 

Subscribers’ copies. 

Sample copies... 

Subscribers’ copies and sample copies combined, 
"Agricultural periodicals: 

Subscribers’ copies.. 

Sample copies. 

Subscribers’ copies and sample copies combined. 
" Magazines: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined 
* Miscellaneous periodicals; 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined 
"All classes: 

Subscribers’ copies. 

Sample copies. 

Subscribers’ copies and sample copies combined. 


Average 

haul. 


Miles, 
704.86 
736.02 
707.11 

520.83 

576.51 
525.49 

907.64 

1.027.02 

920.79 

991.52 
948.21 

990.53 

527.41 
828.46 
540.09 ’! 


The records of 1906 gave no data for the calculation of the aver¬ 
age haul of other classes of mail, and those of October, 1907, do not 
afford a basis for computing the hauls of the different subclasses of 
second-class matter above mentioned. The computations may be com¬ 
pared, however, with respect to the hauls of subscribers’ copies and 
' sample copies, respectively, of all pound-rate matter combined, as 
follows: 



Average haul. 

1906 

19071 

Rnhsmhprs’ popifi.«! . 

Miles. 
527.41 
828.46 
540.09 

Miles. 

602 

873 

615 

Sample copies. 

Subscribers’ copies and sample copies combined. 



^ Report of Weighings of 1907, H. Doc. No. 910, GOth Cong., 1st sess.. Table BB, p. 68. 


Without impugning the method or accuracy of either calculation, 
we can not fail to be struck with the disparity in the results. It 
may be that if we had similar calculations for other classes of mail 
for the six months in 1906, and were able to compute the pound- 
miles accordingly, the latter would show substantially the same ratios 
as are disclosed by the computation based on the average hauls of 
October, 1907. As to this we can not judge. The most favorable 
assumption, on the evidence before us, as to second-class matter paid 
at the pound rate, would be to take its average haul on the basis 
of the calculation for the six months of 1906, and the average hauls ^ 
for all other classes, as shown by the department’s table. We do not 
say that this would be a correct assumption; it would seem rather 
to be a violent one. But it might serve, so far as average haul 

29552°—12-5 
































50 EEPOET OF COMMISSION ON SECOND-CLASS MATTEE. 

is concerned, to indicate the minimum share of the cost of railroad 
transportation to be allotted to second-class matter paid at the 
pound rate. 

Criticism is also made of the average hauls of equipment and 
empty equipment. These are based on the thirty days’ record of 
October, 1907, and are the same for all classes of domestic mail, except 
free-in-county and registry. Thus the average haul of equipment 
used in connection with each class of mail is stated as 401 miles and of 
empty equipment as 346 miles.^ This is said to be an arbitrary appor¬ 
tionment. It is explained that it was impracticable to weigh equip¬ 
ment and empty equipment separately for the several classes of mail, 
and consequently it was dealt with as a whole. While the total 
pound-miles for equipment may not exceed the amount produced by 
multiplying the weight of equipment by the average haul for the 
whole (used and empty, respectively), still it ma}^ be said that as 
between the different classes of mail, this total of pound-miles should 
be apportioned in such a way as to recognize the different hauls of the 
mails of these classes. Thus, it might be assumed that the average 
hauls of the equipment of the different sorts of mail w^ould bear the 
same relation to each other as the average hauls of the mail itself. 

The following tables are presented for the purpose of showing the 
effect of revising the calculations in the manner above suggested with 
respect to equipment and average haul. 

In the first table (Table 4), correction is made for the double 
deduction of registry equipment ^ (in the computation of sack equip¬ 
ment) ; and the weight of equipment of each class of mail transported 
in sacks is computed according to the assumed number of pieces to 
the sack, that is, in the same manner as the total weight of sack 
equipment computed.® In the second table (Table 5), the average 
haul of pound-rate matter is taken from the weighings of 1906; 
and the total pound-miles of equipment and empty equipment respec¬ 
tively (except free-in-county and registry) are divided among the 
several classes of mail in the same ratio as if the equipment had been 
carried as far as the mail to which it related. 


1 Report of Weighings of 1907, Table BB, H. Doc. No. 910, 60th Cong., 1st sess., p. 58. 

2 Supra, p. 41. 

8 Supra, p. 43. 



[Revised, with changes above noted.] 


REPORT OF COMMISSION ON SECOND-CLASS MATTER 


51 


12 

Weight 

of empty 

equip¬ 

ment. 


Pounds. 

34,322,456 

8,295,499 

475,192 

183,288 

40,731 

8,994,710 

17,507,439 

502,340 

726,365 

5,831,288 

67,884,604 

1,169,857 

1,722,512 

CO 

11 

Per 

cent. 

50.56 

12.22 

.70 

.27 

.06 

lO 05 OJ 

I> O iO 

CO to *i-H 00 
IH 

00*001 




10 

Total 
weight of 
equipment. 

Pounds. 

277,238,543.0 

66,982,561.8 

3.845.430.6 

1.486.138.6 

306,183.9 

72,620,314.9 

141,387,638.2 

4,067,550.3 

5,858,945.5 

47,116,047.1 

548,289,039.0 

8,289,168.0 

5,753,492.0 

562,331,699-0 

i 

9 

Weight of 
pouch 
equipment. 

Pounds. 

277,238,543 

• lO » ^ 

• • (M 05 

« 1-H • O 

• oT • t^i-T 

» 05 • O 00 

• (N • t> 

. ocT • 

• r-H • ^ 

• rH • 

447,086,829 




8 

1 

Weight of 
sack 

equipment. 

Pounds. 

66,982,561.8 

3.845.430.6 

1.486.138.6 
306,183. 9 

72,620,314.9 

23,088,463.2 

4,067,550.3 

91,525.5 

1,334,356.1 

101,202,210.0 




I 

7 

Per 

cent 

of 

pieces 

in 

sacks. 


00 O CC O 
l-H CO CO 

O CO tH 

o 

71.74 

22.82 

4.02 

.09 

1.33 

100.00 




6 

Number of 
pieces in 
sacks. 


2,922,875,441 
167,800,610 
64,849,696 
13,360,757 


1,007,496,609 

177,493,123 

3,993,878 

58,226,464 

4,416,096,578 




5 

Num¬ 
ber of 
pieces 
per 
pound 
in 

sacks. 


O CO 00 
05 Ci O 

O (N 1-t 


O CO 05 

lO i-H 05 iO 

00 CO tH lO 





4 

Weights of mail transported. 

In sacks. 

Weight. 

Pounds. 

692,624,512 

24,318,929 

22,133,002 

6,747,857 


117,698,202 
56,168,710 
2,006,974 
10,510,192 

932,208,378 




In pouches. 

Per 

cent 

whole. 

62.01 


. 05 

CO • 04 ^ 

, 04 

o • o 

04 1 ^ 





Weight. 

Pounds. 

118,221,459 


CO • 00 00 
CO • O 04 
O • 05 05 

^ • o^ocT 

^ 1-H 
• Tf< lO 

o * ofoT 

iO • i-H 

190,635,441 




3 

Percentages of 
mail handled 
in— 

j 

Sacks. 

Per ct. 

100 

100 

100 

100 

00010»0 

Ot-.O-'I'CO 

1^ tH 





Pouches. 

Per ct. 
100 


o • »o ^ 

CO • »o CO 

* 

• 

* 




2 

Weights of 
mail. 

Pounds. 

118,221,459 

692,624,512 

24,318,929 

22,133,002 

6,747,857 

745,824,300 
168,140,288 
56,168,710 
4,459,942 
30,029,120 





1 

Items. 

CLASSES OF MAIL. 

■Rirst nlass-. _ 

Second class: 

Paid at pound rate.... 

Free in county. 

Transient. 

To Canada. 

All sftcnnd rlass_ 

Third class. 

Fourth class. 

Franked. 

Penalty. 

Total. 

Registry equipment. 

s 

a 

ft 

3 ^ 
« 1 

s 

o 

1 

5 

> 

> 

< 






































































[Revised, with changes above noted.] 


52 


REPORT OF 


COMMISSION ON SECOND-CLASS MATTER. 



.g 




a 


i 

& 

T) 


g -2 ^ ^ 

I 

s .-h s a 

^ 53 fl i? GO 

I 

I 

a 

®9®v-,.£ln^® 

> St, O-*^ > 

« ® O+J T) *3 . ” 

I5SSII&: 

- ®E-| o •-•S 

®S aw'd-'t ® p 

t3.> a| 

.gai.>'§5o§ 

WT3^'« ^§3 a 

*^.2 043 S '” 

iiillisa 

<M « .03 (S 
-=> 






































































EEPORT OF COMMISSION ON SECOND-CLASS MATTER. 53 

The result of the recalculations, on this basis, is to reduce the share 
of second-class mail, of the cost of railroad transportation, from 50.06 
per cent, as stated in the department’s table, to 46.43 per cent; and 
the share of paid-at-the-pound-rate matter from 47.67 per cent to 
43.95 per cent. Second-class matter as a whole would be charged with 
$20,553,403.53 instead of $22,160,314.07; and paid-at-the-pound-rate 
matter with $19,455,569.38 instead of $21,102,320.65.^ 

2. OTHER TRANSPORTATION. 

The other methods of transportation are by pneumatic tubes, star 
routes, mail messengers, screen wagons, steamboats, and electric and 
cable cars; rural delivery being separately treated as essentially con¬ 
cerned with the collection and delivery, rather than the transporta¬ 
tion, of the mails. 

Pneumatic-Tube Service. 

The cost of this service for the fiscal year 1908 was $482,812.62,* 
and the apportionment was based upon the estimate, by persons 
familiar with the service, of the amounts of different classes of mail 
matter transported thereby and upon statistics taken in various cities 
having such a service.® This assigned 94 per cent to the first class, 1 
per cent to the second class and 5 per cent to the third class. The 
amount charged to second-class mail is so small that for the purpose 
of this report it is unimportant whether the estimate is exactly accu¬ 
rate or not. 

The division of cost is as follows:* 

First class— 

Second class 
Third class _ 

482, 812. 62 


$453, 843. 86 
4, 828.13 
24,140. 63 


1 It will be observed that the total pound-miles calculated in the manner stated, and 
shown in the department’s Table 5, revised (supra, p. 36), were 959,046,833,056. The 
changes in this table reduced this number to 910,938,000,771. 

It is stated by the department that under the contracts, in effect July 1, 1908, based 
upon the average dailj^ weight as ascertained by the quadrennial weighings, the pound- 
miles paid for on all railroad routes were 978,301,679,186. 

2 Annual Report, 1908, p. 332, supra, p. 28. 

•Exhibit 200, p. 29, Table 6, note 2. 

•Exhibit 200, p. 29, Table 6, column 3. 







64 EEPORT OF COMMISSION ON SECOND-CLASS MATTER. 

Transportation by Star Routes, Mail Messengers, Screen Wagons, 
Steamboats, and Electric and Cable Cars. 

The cost during the fiscal year 1908 of these means of transporta¬ 
tion was $11,415,409.75/ composed of the following items: 


Star-route service_$7,125,025. 30 

Mail-messenger service__;- 1,416, 300.19 

Screen-wagon service_ 1,319,017.18 

Steamboat service_ 763,333. 75 

Electric and cable car service_ 791, 733.33 


11,415,409. 75 

Since all classes of mail are carried by these methods and, in the 
absence of evidence showing the actual distribution, have been as¬ 
sumed to be carried in the same proportion, these various forms of 
transportation have been treated alike. In the table first submitted 
by the department the cost was apportioned at the same percentage 
as for railroad transportation; ^ but it was pointed out that the latter, 
being based on the pound-miles, was calculated according to the 
average length of haul; whereas in these other means of transporta¬ 
tion the length of haul is substantially the same for all mail. The 
department therefore presented a new table based wholly on the 
weight of the different classes of mail and equipment, and appor¬ 
tioned the expense in question ($11,415,409.75) according to the per¬ 
centages shown below.^ 



Percentage. 

Expense. 

First class. 

0.3069 

$3,503,389.25 

Second class: 

Paid at pound rate. 

,3423 

.0230 

.0117 

.0031 

3,907,494.76 
262,554. 42 
133,560. 29 
35,387.77 

Free in county. 

Transient. 

Canada. 

All second class (except local delivery). 

.3801 

4,338,997.24 

Third class. 

.1863 

.0285 

.0070 

.0584 

.0276 

.0052 

2,126,690.84 
325,339.18 
79,907.87 
666,659.93 
315,065.31 
59,360.13 

Fourth class. 

Franked. 

Penalty. 

Registry. 

Foreign. 


1.0000 

11,415,409.75 


To obtain these figures the department took the percentages of the 
total mail belonging to the first class, the various subclasses of the 
second class (except local delivery), the third and fourth classes, etc., 
as given by the six months’ weighings of 1907. To these percentages, 
respectively, was added the percentage of equipment for each class of 
mail as found in the case of railroads, and the two percentages so 

1 Annual Report, 1908, p. 332, supra, p. 28. 

2 Exhibit 200, pp. 27, 29. 

8 Submitted to the Commission in explanation of Table 6, revised. See Supplemental 
Statement of Second Assistant Postmaster General, Oct. 20, 21, 1911, p. 16. 






























KEPORT OP COMMISSION ON SECOND-CLASS MATTER. 55 

added together were divided by two to make a new percentage. The 
result, as compared with the department’s original calculation, was to 
reduce the cost allotted to second-class mail by about a million and 
three-quarters of dollars. But this process of adding percentages 
together and dividing by two would seem to be erroneous in view of 
the difference between the amount of mail and the amount of equip¬ 
ment. Ten per cent of 900, which is 90, plus thirty per cent of 100, 
which is 30, does not make twenty per cent but twelve per cent of 
1,000. This error reduced the amount that would have been charged 
to second-class mail had the computation been correctly made on the 
basis taken by the department. 

To make a correct apportionment on the basis of weight, we 
should have the weights of mail and equipment for each class carried 
in each of these services, and divide the expense accordingly. But 
we have not these data. Nor will it aid to assume that each class of 
mail has the same proportionate share of the weight of mail and of 
equipment in these services, as it has of the weight of all mail and 
of all equipment. For we have no evidence as to the percentage of 
the total equipment which should be allotted to each class, but only 
of the respective shares of the weight of equipment carried on rail¬ 
roads, computed in the manner above mentioned. And it would 
seem to be inadvisable, in apportioning the cost of these services, to 
combine, as the department has done, the ratios of the weight of 
mail—ascertained for each class with respect to the weight of all 
mail—and the ratios of the weight of equipment ascertained with 
respect to that part of the equipment which is carried on railroads. 

There remains the assumption that in these services the different 
classes of mail have the same relation to each other as they have on 
railroads with respect both to weight of mail and to weight of equip¬ 
ment. This would not be to assume, as is mistakenly asserted in 
criticism, that all the mails and all the equipment carried on rail¬ 
roads are also carried on these routes, but that all the mail and equip¬ 
ment that are so carried, whatever the amount may be, are trans¬ 
ported—with respect to the several classes—in the same proportion as 
on railroads. This appears to be the only analogy that the evidence 
permits; and we can not say that the assumption is so wide of the 
mark as to be wholly unwarranted. At least, so far as the matter of 
equipment is concerned, it would seem not to be unfavorable to second- 
class matter; for example, the estimates of the department show that 
on star routes the sack equipment is approximately thirty per cent of 
the entire weight of equipment,^ while on railroads it is less than 
twenty per cent.^ 


1 Exhibit 97. 


2 See Table 4, revised, supra, p. 35. 



56 


REPORT OF COMMISSION ON SECOND-CLASS MATTER, 


The result of the calculation, according to this method, is as follows: 

ApiJortionment of cost of transportation t)y star routes, etc. 


* 

Mail and equip¬ 
ment (used and 
empty) carried 
on railroads (see 
Table 4, p. 51). 

Total. 

Per cent. 

Cost. 

First class: 

Mail. 

Pounds. 

118,221,459.0 

311,560,999.0 

Pounds. 

j. 429,782,458.0 

1 

OQ no 

S2,737,415.26 

Equipment. 

zo. ys 

Second class: 

Paid at pound— 

Mail. 

692,624,512.0 

75,278,060.8 

24,318,929.0 

4.320.622.6 

22,133,002.0 

1.669.426.6 

6,747,857.0 

346,914.9 

1 767,902,572.8 

42.85 

4,891,503.08 

Equipment. 

Free in county— * 

Mail. 

I 28,639,551.6 

1.60 

182,646.56 

Equipment . 

Transient- 

Mail. 

1 23,802,428.6 

1.32 

150,683.41 

Equipment. 

To Canada— 

Mail. 

1 7,094,771.9 

.40 

45,661.64 

Equipment. 

Total second class. 



46.17 

5,270,494.69 

Third class: 

Mail. 

168,140,288.0 
158,895,077.2 

56,168,710.0 
4,569,896.3 

4,459,942.0 

6,58.5,310.5 

30,029,120.0 

52,947,335.1 

36,044,732.0 

7,476,004.0 

9,459,025.0 

J 327,035,365.2 

18.25 

2,083,312.28 

EquipTTient . 

Fourth class: 

Mail. 

j- 60,738,606.3 

3.39 

386,982.39 

Equipment. 

Franked: 

Mail . 

1 11,045,252.5 

.62 

70,775.54 

Equipment.. 

Penalty: 

Mail. 

J- 82,976,455.1 

4.63 

528,533.47 

Equipment. 

Foreign: 

Mail. 

]• 43,520,736.0 

2.43 

277,394.45 

Equipment. 

Registry: Equipment. 

9,459,025.0 

.53 

60,501.67 

Total. 

1,791,997,223.0 

1,791,997,223.0 

100.00 

11,415,409.75 


At this point the department submitted a summary statement of 
the cost of the entire transportation of mails by railroads and other 
methods^ After making the changes with respect to method and 
basis of computation, which we have indicated, the division of the 
entire expense of transj)ortation appears in the following table: 

Table 6. 


[Revised, with changes above noted.] 


1 

Items. 

2 

Railroad trans¬ 
portation. 

3 

Pneumatic- 
tube service. 

4 

Other trans¬ 
portation. 

5 

Total cost 
transportation 
(exclusive of 
post-oflBcecars). 

Classes of mail: 

First class. 

Second class— 

Paid at pound rate. 

Free in county. 

Transient. 

$8,114,234.05 

$453,843.86 

$2,737,415. 26 

$11,305,493.17 

19,455,569.38 
8,853.49 
787,961.62 
301,019.04 


4,891,503.08 
182,646.56 
150,683. 41 
45,661. 64 

24,347,072.46 
191,500.05 
938,645.03 
346,680.68 
4,828.13 

To Canada. 


Local delivery. 

4,828.13 

All second class. 

Third class. 

Fourth class. 

Congressional free (franked). 

Departmental free (penalty). 

Foreign. 



20,553,403. 53 

4,828.13 

5,270,494.69 

25,828,726.35 

9,008,437.68 

1,978,757.56 
323,152. 79 
2,828,693. 70 
1,235,063. 44 
225,764. 38 

24,140. 63 

2,083,312. 28 
386,982.39 
70,775.54 
528,533. 47 
277,394.45 
60,501, 67 

11,115,890.59 
2,365,739.95 
393,928.33 
3,357,227.17 
1,512,457,89 
286,266.05 

Special service: Registry. 

Total. 


44,267,507.13 

482,812.62 

11,415,409.75" 

56,165,729.50 


1 Table 6, revised. See Supplemental Statement of Second Assistant Postmaster General. 

submitted Oct. 20, 21, 1911, p. 16. ’ 

















































































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 57 

3. EAILWAY POST-OFFICE CAE SEEVICE. 

Besides the payment made to the railroads on the basis of the 
weight carried, there are two other sources of expense connected with 
railroad transportation, both relating to the railway post-office cars 
used for sorting the mail in transit. There is, first, the payment to 
the railroads for the use of these cars, over and above the payment 
for the weight of the mail carried, which will be considered here; 
and, second, there are the salaries of the clerks and officials who sort 
the mails in those cars, which will be considered later under the head 
of handling. 

The cars are either full post-office mail cars—that is, cars wholly 
occupied by post offices—or apartment cars—that is, where a portion 
of a car is used and the rest is devoted to other purposes. The rail¬ 
roads are paid for the use of these cars a certain amount per mile per 
annum according to their length, where it is 40 feet or more. For 
space in cars of less length, there is no additional payment over the 
amount paid for carrying the mails. The rate of compensation is 
fixed by the act of March 3, 1873,^ as amended by the act of March 
2, 1907.2 



Before 
July 1,1907. 

After 

July 1,1907. 

40 feet in length. 

45 feet in length. 

60 feet in length. 

65 feet or more in length. 

.per mile per annum.. 

.do_ 

$25.00 

30.00 

40.00 

50.00 

$25.00 

27.50 

32.50 
40.00 


The amount paid for this service in the fiscal year 1908 was 
$4,638,971.51.2 

The department first apportioned to foreign mail 2.96 per cent of 
this cost, or $137,313.56, on an estimate that this was its percentage 
of the entire weight of the mails carried on these cars.^ 

The rest of the cost was apportioned according to the space devoted 
to letter separation, paper separation and storage. For this purpose 
the department measured the space in 776 cars in actual use, taking 
two hundred and seventy 40-foot cars, seven 45-foot cars, one hun¬ 
dred and seventy-three 50-foot cars, four 55-foot cars, and three hun¬ 
dred and twenty-two 60-foot cars.® By that means it was ascertained 
that the average proportion of space used for letter separation was 26 
per cent; for paper separation, 48 per cent; and for storage, 26 per 
cent.® And the amount paid to the railroads for the use of these 

1 Chapter 231, 17 Stat., 658. 

2 Chapter 2513, 34 Stat., 1212. 

8 Annual Report, 1908, pp. 332, 333. Includes $71,605.26, being credit certified in favor 
of the Central Pacific Railway Co., aided, supra, pp. 28, 29. 

* Exhibit 200, p. 32. 

6 Id., p. 31. 

8 This storage space in post-office cars is not to be confused with storage cars. The 
latter are supplied merely for carrying the mail, and the charge is solely on the basis 
of weight, without an additional charge for car. 













68 


EEPOBT OF COMMISSION ON SECOND-CLASS MATTER. 


cars, after deducting the portion allotted to foreign mail, was divided 
accordingly. 

In order to make the apportionment among the different classes of 
mail, the department estimated the proportion of the pieces of each 
class which were distributed in the letter and paper spaces, respec¬ 
tively, and of the weight of each class held in the storage space. 
Obviously all first-class mail, handled in the post-office cars, is distrib¬ 
uted in the letter space; all second-class mail (except 28.35 per cent, 
which receives no handling in these cars) and all fourth-class mail 
were considered as distributed in the paper space; but part of the 
third-class, franked and penalty mail is handled in each space, 
according to the size of the piece. From the opinions of railway 
mail service and post-office officials, and from tests in the post offices 
at Washington, New York and Chicago, it was assumed by the de¬ 
partment that 75 per cent of the pieces of third-class mail (circulars, 
etc.), 50 per cent of the franked and 90 per cent of the penalty mail 
were distributed in the letter space and the rest in the paper space.’ 

Applying these percentages, and after making a deduction of an 
amount which was taken to represent local delivery, the cost assigned 
to the spaces used for letter and paper separation, respectively, was 
apportioned on the basis of the number of pieces shown by the seven 
days’ count in October, 1907, except the 28.35 per cent of second-class 
mail, which is inclosed in sacks addressed directly to a post office and 
is not separated in the cars.^ 

The estimated cost of the storage space, after deducting 10 per cent 
for registered mail, was divided among the different classes according 
to their respective percentages of the total weight of domestic mail as 
shown by the six months’ weighing in 1907.® But in the course of 
the hearing it was pointed out that deduction had not been made in 
this calculation for the 28.35 per cent of the direct second-class mail, 
which did not, or should not, occupy any of this space. The depart¬ 
ment, therefore, submitted a new table in which that proportion of 
second-class mail was omitted in dividing the cost of storage space.'* 
This reduced the cost attributed to second-class mail by $84,165.66. 
In the recalculation no allowance was made for any mail, other than 
second-class mail, which might be sent direct without being distrib¬ 
uted or carried in the post-office cars. The omission would tend to 
favor second-class matter; but there are no data by which it can be 
corrected. 

1 Exhibit 200, p. 32; Typewritten Record, pp. 876-877. 

2 Memorandum on behalf of the Tost Office Department dated Nov. 27, 1911, pp. 13, 14 • 
Typewritten Record, pp. 872-876. The figures are computed from Tables O and DD of 
the Report of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., p. 26. 

2 Exhibit 200, pp. 32, 33. See Table C ; H. Doc. No. 910, 60th Cong., 1st sess., p. 21. 

4 That is, the percentage previously ascribed to second-class mail of the total domestic 
mail was reduced 28.35 per cent and new percentages were then obtained showing the 
relation of the different classes of mail on this basis. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


59 


The table so revised is as follows:^ 


Brief Series No. 8 (Table 8a). —Showing apportionment of expenditures for 
railway post-offl.ee ear service to the classes of mail and the registry service 
according to space used for letter and paper separation and for storage {re¬ 
vised on basis of exclusion of 28.35 per cent of second class not carried in 
storage space). 


[Submitted to the Commission Aug, 23, 1911. Typewritten Record, p. 1588.] 


Space. 

First class. 

Second class. 

Third class. 

Fourth class. 

Letter space. 

$926,864.89 


$210,327.34 
269,236.39 
187,924.68 


Paper space. 

$1,782,223.02 
589,055.40 

$92,699.95 

61,623.29 

Storage space. 

164,855.45 

Total. 

1,091,720.34 

2,371,278.42 

, 667,488.41 

154,323.24 


Space. 

Congressional, 

free.i 

Departmental, 
free (penalty). 

Registry. 

Total expendi¬ 
tures. 

Letter space. 

$819.11 
2,808.45 
4,740.25 

$32,419.86 
13,828.53 
45,190.41 


$1,170,431.20 
2,160,796.34 
1,170,430.41 

Paper space. 


Storage space. 

$117,040.93 

Charged to foreign mail. 

4,501,657.95 
137,313.56 

Total.. 




8,367. 81 

91,438.80 

117,040.93 

4,638,971.51” 



1 Franked. 


After the close of the hearings the department modified this table 
by introducing its changed calculation of the number of pieces, of 
fourth-class mail.^ But for the reasons given in an earlier part of 
this report, this new computation is not adopted.^ At the same time 
the department presented to the Commission a further division of the 
cost of the post-office car service among the subclasses of second-class 
mail, to wit, paid at the pound-rate, free-in-county and transient, 
which was made according to the relative number of distributions 
of each of these subclasses as ascertained by the method adopted in 
apportioning the cost of the railway mail service.^ In this subdivi¬ 
sion the department took the total amount ascribed to second-class 
mail by its last revision, instead of that stated in the above table. If 
we take the latter amount and divide it according to the percentages 
of the distributions in the railway mail service, hereafter stated,® 
the result is as follows: 


1 

Subclass. 

2 

Distribution. 

3 

Per cent. 

4 

Amount. 

Pair? nf ■nnnnd rate . ...... 

2,654,806,054 
125,374,548 
74,179,941 

93.01 

4.39 

2.60 

$2,205,526.06 
104,099.12 
61,653.24 

Free in county...... 

Transient. 


2,854,360,543 

100.00 

2,371,278.42 


1 Table 8a, Exhibit 201, p. 13. . i on o-i 

2 Supplemental Statement of Second Assistant Postmaster General, Oct. 20, 21, 1911, 

p. 18. 

< iupplemental Statement of Second Assistant Postmaster General, Oct. 20, 21, 1911, 
p. 18. 

6 See infra, p. 63. 

















































60 KEPOET OF COMMISSION ON SECOND-CLASS MATTEE. 

In addition to whatever question there may be as to the general 
estimates used in the computation, the apportionment shown in Table 
8a is open to criticism (1) with respect to the accuracy of the cal¬ 
culation of the deductions for local delivery, in dividing the esti¬ 
mated cost of the letter and paper spaces, (2) for the reason that the 
estimated cost of storage space was not apportioned (after deduct¬ 
ing the direct second-class mail) according to the percentage of 
weight, of the different classes, carried on railroads, but according to 
their percentages of the weight of all mail, and (3) for the failure to 
make suitable allowance for mail other than second class not dis¬ 
tributed or carried in the cars; but, in our judgment, if the theory of 
apportionment adopted by the department be deemed correct, a 
revision would not change the result to such a degree as could be 
considered important in this inquiry. 

The theory of apportionment—according to space—does not accord 
with the views expressed in the report of the public accountants, to 
which we have alluded. They suggested that the special compen¬ 
sation paid to railway companies for these cars should be treated 
as a part of the expense of the railway mail service, and 
should be apportioned on the basis of the number of pieces of each 
class handled in the cars—that is, in the same manner as the com¬ 
pensation of officials and employees engaged in that service.^ We 
are of opinion that a valid distinction may be made, in the method of 
apportionment, between the amount paid for the use of the cars and 
the amount paid for work in the cars, and that the former may well 
be divided on the basis of space and the latter on the basis of distribu¬ 
tions. It should be added, however, that if the compensation for the 
use of the cars were divided according to distributions the share of 
second-class mail would be $1,048,211.23 instead of $2,371,278.42, as 
given in the above table, and the share of pound-rate matter would 
be $974,892.85 instead of $2,205,526.06. The effect of this difference 
in computation will be considered in the summary of the apportion¬ 
ment of cost.^ 

B. APPORTIONMENT OF COST OF HANDLING THE MAILS. 

The next great expense is the cost of handling the mail, using the 
word in the broadest sense. It covers the collection, separation— 
that is, sorting and tying up in packages or bundles and placing in 
pouches or sacks at the office of origin; separation wherever neces¬ 
sary on the railway-mail cars; and the final sorting and delivering at 
the office of delivery, including the rural delivery service. 

Now, in the case of second-class matter paid by the pound, a part 
of this work, under the instructions issued by the department, is done 

1 Preliminary Report of Joint Commission on Business Method of Post Office Depart¬ 
ment, S. Kept. No. 201, 60th Cong., 1st sess., p. 95. 

2 Infra, pp. 80, 81. 



61 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

by the publishers. They are required to sort, pack and deliver the 
papers or periodicals which they send out; the extent to which the 
mail for different post offices, railroad routes, dr cities is separated 
and marked depending somewhat on the amount of mail for those 
places. Mail packed in sacks, sorted as fully as it would be in the 
post office of origin and therefore ready to go directly to the railroad, 
is called “ fully made up.” About seventy-seven per cent of all second- 
class matter is “ fully made up ” in this way, and therefore is not sorted 
in the office of origin.^ Sixteen per cent is “ partly made up,” and 
requires a certain amount of sorting in that office; while seven per cent 
is “ mixed ”—that is, wholly unseparated, and separation must be 
made in the office of origin. This explanation is made because the 
publishers seem to have been under a misconception in the matter. 
Complying with the requests of the department, they have been, as 
already stated, in the habit of packing most of the periodicals they 
mail in sacks, labeled for different parts of the country—routed, as 
it is called—and delivering them at the cars instead of at the post 
office. They have been apparently under the impression that this 
proportion of their mail being “ fully made up,” was not handled 
at all in the post-office cars. But ‘‘ fully made up ” means made up 
as fully as it would be at the post office of origin—not made up for 
its ultimate destination, most of it being packed in sacks labeled 
merely for States or railway routes. This is redistributed in the 
railway mail service for the separate post offices, the only proportion 
of second-class mail not handled at all being, as stated by the depart¬ 
ment, 28.35 per cent in sacks addressed directly to single post offices.^ 

1. RAILWAY MAIL SERVICE. 

The cost of the railway mail service—that is, the handling of the 
mail in the post-office cars—for the fiscal year 1908 was $17,373,- 
336.92.® From this was deducted the estimated expense of registry 
and foreign mail, amounting to $2,285,552.04. This deduction is 
thus explained by the department: ^ • 

“The expenditures applicable to the registry service were estimated as fol¬ 


lows: 

Expense of registry terminal railway post offices- " $143,700 

Fifty per cent of the salaries of 2,557 clerks, one clerk in each full 

railway post-office crew, at $1,160, average salary-* 1,483,060 

Ten per cent of the salaries of 3,882 clerks, one clerk in each apart¬ 
ment-car crew, at $1,160, average salary- “450,312 


Total_ 2,077,072 


1 Typewritten Record, pp. 657-659. 

2 Typewritten Record, pp. 875—876; see also pp. 662—663. 

8 Annual Report, 1908, p. 332, supra, p. 28. 

‘Exhibit 200, pp. 33, 34. 

“ 6 Actual expense for the year 1908. 

“ 8 Estimates based upon the opinions of Railway Mail Service officials and taking into 
consideration the number of crews in the Railway Mail Service.” 









62 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

“The expenditure applicable to the foreign mails was apportioned as $208,- 
480.04. The apportionment was based upon the per cent of the pieces of foreign 
mail to the whole number of pieces of all mail matter, domestic and foreign, as 
estimated from the special weighing figures (1.20 per cent). (See Table X, 
p. 29, H. Doc. No. 910.)” 

The department first presented a computation for the apportion¬ 
ment of the remainder, $15,087,784.88, based upon the number of 
distributions and redistributions estimated as having been made in 
the railway mail service in the fiscal year 1908.^ In this estimate 
it was assumed that on the average there were 40 letters to a pack¬ 
age and 150 papers—that is, newspapers and periodicals—to a sack, 
requiring separate distributions. But the computation was defec¬ 
tive, because it took no account of such packages of letters and 
bundles of papers as need no further separation and remain unbroken. 

To meet this difficulty the department submitted the result of a 
count which it had taken during the seven days beginning November 
13, 1910, of the number of pieces of letter mail to a package and the 
number of pieces of periodicals or papers to a sack as they were ac¬ 
tually sorted on the railway mail cars; a “ piece being either a single 
letter, paper or periodical, or a package or bundle of them tied to¬ 
gether which was handled as a single unit and the contents of which 
were not distributed. This process gave an average of 25.16 “ pieces ” 
to a package of letters and 52.14 to a sack of paper mail.^ Applying 
these ratios to the number of packages of letters and sacks of papers 
reported to have been distributed in the post-office cars during the 
fiscal year 1908, it was found that there were 7,488,565,236 distribu¬ 
tions and redistributions of letters and 3,482,626,333 of papers.® 

For the purpose of apportioning these distributions among the 
several classes of mail, the number of pieces of each class was taken, 
as shown by the seven days’ count in October, 1907.^ Deductions 
were made for local deliver}^ based upon percentages deduced from 
the record of the thirty days’ weighing in October, 1907; ® and in the 
case of second-class mail there was a further deduction of 28.35 per 
cent for the direct mail not distributed in the cars.® It was then 
assumed (upon the department’s estimates already mentioned ^) that 
of the remaining number of pieces 100 per cent of first class, 75 per 
cent of third class, 50 per cent of franked and 90 per cent of penalty 


1 Exhibit 200, p. 84. 

2 Typewritten Record, pp. 1573, 1574. Recapitulation of seven days’ count of mail on 
railway post-office lines beginning Nov. 13, 1910, Typewritten Record, pp. 1700, 1701. 

» Typewritten Record, p. 1702. 

* Table O, Record of Weighings of 1907, H. Doc. No. 910, 60th Cong., 1st sess., p. 26. 
For some unexplained reason only one-quarter of the number of pieces of franked matter 
was taken. See Table O and explanation of process in Typewritten Record, pp. 1707, 1708.- 
The number, however, is so small that the effect upon the apportionment to second-class 
mail is inconsiderable. 

® Save in the case of free-in-county matter, where the estimate was based on the result 
of inquiries in particular offices. See supra p. 37, 

® Typewritten Record, p. 1708, 

’ Supra, p. 58. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


63 


were handled as letters; and that 100 per cent of second class and of 
fourth class, 25 per cent of third class, 50 per cent of franked and 
10 per cent of penalty were handled as papers.^ The total number of 
letter distributions and paper distributions, respectively, were divided 
among the different classes according to the relative number of pieces 
thus estimated. And, combining the results, the percentage for each 
class of the entire number of distributions was ascertained, as follows 


^^Consolidation of handlings on basis of pieces handled as letters and pieces 

handled as paper mail. 


Class. 

Handled as 
letters. 

Handled as papers. 

Totals. 

Per cent. 

First. 

5,935,436,806 


5,935,436,806 

2,654,806,054 

125,374,548 

74,179,941 

54.10 

Second: 

Pound rate. 

2,654,806,054 

125,374,548 

74,179.941 

24.20 

Free in county. 


1.14 

Transient...... 


.68 



All second class.... 


2,854,360,543 
449,258,797 
154,628,609 
1,393,050 
22,985,334 

2,854,360,543 
1,793,456,257 
154,628,609 
2,890,763 
230,418,591 

26.02 

Third. 

1,344,197,460 

16.35 

Fourth. 

1.41 

Franked. 

1,497,713 
207,433,257 

.02 

Penalty. 

2.10 


Total. 

7,488,565,236 

3,482,620,333 

10,971,191,569 

- 100.00” 



These percentages were used in apportioning the cost of the rail¬ 
way mail service after deducting the share attributed to registered 
and foreign mail. The effect of the change in the method of compu¬ 
tation from that originally adopted by the department was to reduce 
the charge to second-class matter by the sum of $555,230.49.^ The 
following table gives the result: ^ 


“ Brief Series No. 9. — Apportionment of expenditures for Railivay Mail Service 
{based on new data as to number of pieces to the package and sack). 


r Submitted to the Commission Aug, 23, 1911, Typewritten Record, pp, 1581, 

1712,] • 


1711 and 


Class of mail. 

Number of distributions and 
redistributions. 

Per cent. 

Amount. 

First. 

5,935,436,806 

2,654,806,054 

125,374,548 

74,179,941 

54.10 

24.20 

1.14 

.68 

$8,162,491.62 

$3,651,243.94 

172,000.75 

102,596.93 

Second: 

Paid at pound rate... 
Free in county. 

Transient. 

All second class. 

Third. 

2,854,360,543 
1,793,456,257 
154,628,609 
2,890,763 
230,418,591 

26.02 
16.35 
1.41 
.02 
2.10 

3,925,841.62 

2,466,852.83 

212,737.77 

3,017.56 

316,843.48 

Fourth,,. 

Franked. 

Penalty. 

Total. 

10,971,191,569 

100.00 

15,087,784.88 
2,077,072.00 
208,480.04 








17,373,336.92’* 





1 Typewritten Record, pp. 1707, 1708. 

^ Tvnewritten Record, pp, 1710, 1711. 

8 Compare Exhibit 200, p. 34, with Exhibit 201, p. 14 ; Typewritten Record, p. 1581. 

* Brief Series No. 0, Exhibit 201, p. 14. This table was subsequently modifled by the 
department to embody the result of its new computation of the number of fourth-class 
pieces which has been repeatedly mentioned. Supplemental Statement of Second Asslst- 
W Postmaster General, Oct. 20, 21, 1911, p. 19. See supra, p. 25. 





















































64 BEPOET OF COMMISSION ON SECOND-CLASS MATTEE. 

It will be observed that as the number of distributions of letter 
and paper mail, respectively, is based upon the new count of “ pieces,” 
that is, treating each unbroken package or bundle as one piece, while 
the division of these two kinds of mail between the different classes 
of mail rests upon the seven days’ record of 1907 (when apparently 
the count was of individual pieces), the calculation necessarily as¬ 
sumes that the ratios in the latter case obtain in the former; in other 
words, that on the average the number of pieces of the different sorts 
of mail in the unbroken packages of letters and bundles of papers 
were relatively the same as those shown by the count of individual 
pieces in 1907. This is neither established nor disproved. With 
respect to second-class matter, the assumption is used only in appor¬ 
tioning the distributions of paper mail among its subdivisions. And 
it does not seem probable that the assumption is so far from the fact 
as greatly to alter the cost attributable to second-class mail or to 
that part of it which is paid at the pound-rate. 

It is further objected that the computation is discredited by the 
fact that “ although third-class mail matter transported on railroads 
is 168,140,288 pounds (Table 5, revised) as opposed to 118,221,459 
pounds of first class (Table 5, revised), and 75 per cent of third class 
is handled in the railway mail service as letter mail it is only charged 
in apportioning the railway mail service clerks’ salaries with 16.35 
per cent,” as against 54.10 per cent for first class. But.tbe depart¬ 
ment’s estimate of 75 per cent of third-class matter handled as letter 
mail is not of pounds, but of pieces. It assumes in its railroad table 
that only thirty per cent of the weight of third-class mail is carried 
in pouches as letters. 

By the apportionment second-class matter is charged with 26.02 
per cent of the cost of the railway mail service (after deducting the 
share of registered and foreign mail), and pound-rate matter with 
24.2 per cent, while first-class mail is charged with 54.1 per cent. 
It must be remembered that while second-class matter is largely made 
up for States, for routes, and for post offices, so as to reduce the 
handling required in the railway mail service, this is also true of 
first-class and other mail which are made up in the office of origin in 
substantially the same manner. Indeed, it may be said that if there 
is any difference in the degree to which the separation is carried, in 
order to avoid unnecessary handling in the post-office cars, it may 
well be in favor of that mail which is prepared in the post office of 
origin, where it would seem a finer separation can be made than it is 
practicable to require of publishers of second-class matter. 


REPOllT OF COMMISSION ON SECOND-CLASS MATTER. 65 

2. EUEAL DELIVEEY SEEVICE. 

Under the head of handling may be placed the rural delivery 
service. The cost of this in the fiscal year 1908 was $34,355,209.04.^ 
The department’s original computation was based upon an actual 
count of the number of pieces of each class of domestic mail “on 74 
rural-delivery routes from 21 post offices in 18 States during a period 
of three months.” ^ Objection was raised to the number of routes as 
too small to furnish a fair average. 

Another count was made throughout the month of May, 1911, of 
all pieces of all mail matter collected and delivered by the rural 
carriers on 39,794 routes, and the result was presented to the Com¬ 
mission.^ An apportionment of the cost of the service, for the year 
1908 on this basis increased the proportion attributed to second- 
class mail from 40.23 per cent to 45.88 per cent, a difference of about 
$2,000,000.^ The proportion so found is confirmed by a count made 
in the spring of 1909, which gives the percentage of pieces of second- 
class mail as about 45 per cent.'^ 

The actual count in May, 1911, was as follows: 


Count and weight of mail matter eollected and delivered on 39,794 rural routes 
in the United States during May, 1911 {revised). 



Number. 

Weight. 

First-class mail; 

1 .fitters. 

58,750,858 

28,369,219 

145,652 

Pounds. 
1,488,690 
344,537 
29,978 

Postal cards. 

Other sealed matter. 

Total. 

87,265,729 

1,863,205 

Second-class mail: 

N ewspapers. 

81,152,011 

7,767,838 

13,778,417 

1,202,041 

14,280,942 
2,377,894 
1,998,091 
255,450 

Magazines. 

Free in county mail... 

Transient mail. 

Total . 

103,900,307 

18,912,377 

Third-class mail: 

"RnriTrs ... 

348,778 

21,354,528 

2,956,228 

287,735 

1,675,077 

666,839 

Circulars . 

Other third class . 

Total . 

24,659,534 

2,629,651 

Fourth-class mail* Merchandise—packages. 

2,716,816 

1,278,866 

Franked and penalty mail: 

Vranlrpd letters .-. 

354,177 

533,272 

1,028,646 

301,023 

24,880 

107,334 

49,357 

41,136 

Franked rJnenments ........_... 

pAnalty ifittfirs (nflFifiial) ... 

Penalty documents (official). 

Tntnl .... 

2,217,118 

. 222,707 



1 Annual Report, 1908, p. 333, supra p. 28. 

2 Exhibit 200, p. 35. 

2 Typewritten Record, pp. 1612, 1613, 2432; Exhibits 172, 173; Exhibit 201, p. 14; 
Supplemental Statement, Oct. 20, 21, 1911, pp. 19, 20. 

*■ Compare Exhibit 200, p. 35, with Exhibit 201, p. 14. 

® Exhibit 200, p. 36; Annual Report, 1909, p. 352. 

29552°—12-6 







































66 ^ EEPOET OF COMMISSION ON SECOND-CLASS MATTEE. 


Coimt and weight of mail matter collected and delivered on 39,794 rural routes 
in the United States during May, 1911 (revised )—Continued. 



Number. 

Weight. 

Foreign maii: 

Foreign letters. 

567,371 

208,795 

Pounds. 

25,249 

34,009 

Other foreign matter. 

Total. 

776,166 

59,258 

Registered mail: 

Letters. 

154,477 

41,160 

15,060 

22,624 

Other registered mail. 

Total registered mail. 

195,637 

37,684 

Grand total. 

221,731,307 

25,003,748 

Money orders issued and paid on above rural routes for May, 1911: 

Issued.-. 

760,884 

24,898 


Paid. 





The pieces of registered mail and the money orders were multiplied 
by five, it being estimated that they require five times the amount of 
time and labor necessary for dealing with other mail.^ Subject to 
this exception, the apportionment of cost was based upon the number 
of pieces of each class of mail collected and delivered in the rural 
delivery service; and in view of the fact that the wagons at present 
are not often full, this seems fair, although the pieces of second-class 
mail weigh on the average more than eight times as much as those of 
the first class, the total number of pieces of the first class being 
87,265,729, and their weight 1,863,205 pounds, while the number of 
pieces of the second class is 103,900,307, and their weight 18,912,377 
pounds. The apportionment of the expenses by number of pieces 
was criticized, and it was insisted that time ought to have been taken 
as the basis. An effort was made to show that, whereas in rural 
delivery only a small amount of second-class mail paid at the pound- 
rate is collected and much is distributed, it takes far longer to col¬ 
lect mail per piece than it does to deliver it. In the opinion of the 
Commission, however, this has not been proved. In fact any at¬ 
tempt to compute the amount of time that it takes a rural carrier to 
collect and deliver the different classes of mail would probably be 
futile, and the apportionment by the number of pieces seems to be 
more practicable. 

The publishers of magazines contended also that the rural delivery 
is of little value to them and should not be heavily charged again^ 
their periodicals. It is true that the magazines furnish only about 
3J per cent of the pieces and 9 per cent of the total weight carried; but 
the other kinds of second-class mail use the service largely, the “ free- 
in-county ” publications, although less in weight, furnishing more 
than 6 per cent of all the pieces and other newspapers more than one- 
third of the total number of pieces and more than one-half of the 

1 In the original estimate of the department the number of pieces was multiplied by 
three. Exhibit 200, p. 35. In view of the objection of the publishers that this was too 
small, five was substituted In the final table. 


























REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


67 


total weight on rural routes. While, therefore, publishers of maga¬ 
zines may be right in urging that the rural delivery service does not 
benefit them to any great extent, it does largely benefit second-class 
matter as a whole. Questions with respect to the relative total cost 
and the advisability of making a difference in rates for different kinds 
of second-class mail will be considered later.^ 

The results of the apportionment, for the various classes of mail, 
are as follows: ^ 


“ Brief Series No. 10, —Apportionment of rural delivery expenditures on hasis 
of count of May, 1911 {revised). 


[Substituted Aug. 31 1911, by letter, for table submitted to the Commission Aug. 23. 
1911, typewritten record, p. 1613, and Exhibit 201, p. 14.] 


1 

Classes of mail. 

2 

Pieces. 

3 

Per cent. 

First. 

87,265,729 

38.54 

Second: 



Paid at pound rate. 

88,919,849 

39.27 

Free in county. 

13,778,417 

6.08 

Transient. 

1,202,041 

.53 

All second class. 

103,900,307 

45.88 

Third. 

24,659,534 

10.89 

Fourth. 

2,716,816 

1.20 

Franked. 

887,449 

.39 

Penalty. 

1,329,669 

.59 

Foreign. 

776,166 

.34 

Registry (195637 X5). 

978,185 

.43 

Money orders (785782 X5)... 

3,928,910 

1.74 

Total. 

226,442,765 

100.00 


4 

Amount. 


$13,240,497.56 


$13,491,290.59 

2,088,796.71 

182,082.61 


15,762,169.91 

3,741,282.26 

412,262.51 

133,985.32 

202,695.73 

116,807.71 

147,727.40 

597,780.64 


34,355,209.04 


3. GENEEAL POST-OFFICE SEEVICE. 

In the effort to make a proper division of cost the greatest diffi¬ 
culty is met in connection with the expense of handling the mail in 
the post offices throughout the country; and, of all the computations 
made by the department, those relating to this matter are the least 
satisfactory. 

The expenditures grouped under this head, for the fiscal year 1908, 


amounted to $86,392,896.35, distributed as follows: ® 

“ Compensation of postmasters-$25,599,397.52 

Assistant postmasters and clerks in post offices- 30,903,351.75 

City Delivery Service- 26,343,201.19 

Miscellaneous items, first and second class offices_ 254,637.37 

Rent, light, and fuel- 3,193,820.94 

Supplies, City Delivery Service- 67,050.60 

Assistant superintendents, Salaries and Allowance Division_ 30,747.03 

Miscellaneous items. Office of First Assistant Postmaster 
General_ 689.95 


Total_$86,392. 896.35 ” 


1 Infra, pp. 96, 97. 

3 Exhibit 173; Exhibit 201, p. 14 ; Supplemental Statement, Oct. 20, 21, 1911, p. 20. 
«Annual Report, 1908, pp. 332, 333; Exhibit 200, p. 36. 





































68 


KEPOBT OF COMMISSION ON SECOND-CLASS MATTEE. 


From this total sum were deducted (1) $3,722,602.39 on account 
of the registry service, this amount being taken from the estimates of 
postmasters, (2) $2,498,574.71 on account of the money-order service, 
resulting from similar estimates, and (3) $125,000 charged to special 
delivery.^ 

For the apportionment of the remaining $80,046,719.25 - the depart¬ 
ment submitted a computation based on the estimated number of 
handlings of the different classes of mail matter, multiplied by the 
number of pieces passing through the mail after certain allowances 
were made for difference of time in handling. It was estimated from 
tests in several large post offices that ordinary letters and circulars 
could be handled in about one-third the time required for newspapers 
and packages. “ Therefore, the total number of pieces of first-class 
mail,” and of the estimated number of the other classes of mail 
handled in the same way (that is, 75 per cent of third class, 50 per 
cent of franked and 90 per cent of penalty), “ were reduced two- 
thirds to place them on an equal basis with paper and package 
mail.” ® Upon these estimates a table was presented charging second- 
class matter with 26.88 per cent of the cost of the general service.'* * 
The apportionment was as follows: ® 


Classes of mail: 

First. 

Second. 

Third. 

Fourth. 

Franked. 

Penalty. 

Foreign. 

Special services: 

Registry. 

Money order.... 
Special delivery 

Total. 


Items. 


Compensation 
of postmasters, 
clerks, carriers, 
rentals, miscel¬ 
laneous. 


?40.519,373.35 
21,516,411.55 
13,079,544.82 
2,249,297.49 
88,050.79 
1,048,604.88 
1,544,891.06 


3,722,603.01 

2,499,119.40 

125,000.00 


86,392,896.35 


Strenuous objection was raised to the statement that letters could 
be handled three times as rapidly as newspapers and periodicals.® 


1 Supplemental Statement, Oct. 20, 21, 1911, pp. 37, 38; Exhibit 200, pp. 37, 42, 43. 

2 Owing to small differences in the deduction for registry and money-order services, 
this figure appeared in Exhibit 200, p. 37, as $80,046,173.94. 

* Exhibit 200, p. 37. 

* Exhibit 200, Table 9, pp. 40, 41. 

B Exhibit 200, Table 11, p. 50, column 7. 

9 As to the relative time for handling pieces of first and second class mail, respectively, 
the department states in its memorandum of Oct. 28, 1911 (p. 22) : “ So far as the 
3-to-l theory Is concerned, the matter was disposed of finally when the post-office tables 
were prepared on the May count and submitted to the commission, as the apportionment 
of expenditures was made upon the time ratio compiled from the reports of that count. 
As to whether or not the original theory was approximately correct is not relevant now 
to the question of apportionment under the tables mentioned. However, as a matter of 
information, the department has made a computation based on the face of the reports 
from 300 offices and submitted it to the commission, which computation shows the ratio 
of 31.45 for first-class matter to 22.99 for second-class matter handlings in 1 minute.” 



















REPORT OF COMMISSION ON SECOND-CLASS MATTER. 69 

The Commission was also satisfied that by the method adopted— 
although this was apparently not the intention of the department— 
where a sack containing, for example, 150 copies of a periodical was 
sent by publishers direct to a news agent and delivered at the office 
of destination without opening, it was treated as having received one 
handling for each copy it contained; in other words, 150 handlings, 
or, in view of the estimated difference in time consumed, an equiva¬ 
lent to one handling for each of 450 separate letters. It was also 
pointed out that in order to obtain a proper apportionment a distinc¬ 
tion should be made between the different classes of post offices, and 
between those where second-class matter was, and was not, entered. 

Starting afresh, the department divided the general post-office 
expenses for the fiscal year 1908 among the different classes of offices, 
distinguishing, in each class, those of entry and nonentry for second- 
class mail.^ There were then submitted the results of an attempt to 
measure the actual time spent in handling the various kinds of mail 
in the first, second, and third class post offices throughout the United 
States during the month of May, 1911. For fourth-class offices an 
estimate was based on reports from certain third-class offices where 
the conditions were deemed to be similar. The apportionment of 
time thus obtained was then applied to the expenses of 1908. Deduc¬ 
tions having been made for the registry and money-order services, 
the various salaries, special and miscellaneous expenses in the differ¬ 
ent classes of post offices were divided among the classes of mail ac¬ 
cording to the ratio so found of the time occupied in handling each 
of them. 

Two forms were sent to postmasters for returns of the May, 1911, 
count, one of them, “ Form G,” relating to the city carrier service; 
while the other, “ Form F,” related to all other handling of the mails 
at the office. The forms were designed to show the average number of 
handlings per piece as well as the actual time consumed; but the 
reports of the former were found to be too uncertain for use in com¬ 
piling the tables. Under “ Form F,” 7,150 reports were received from 
postmasters of first, second, and third class offices, but of these only 
3,256 were used in the tables which were submitted by the department 
to the Commission in September, 1911, the rest being regarded as too 
defective for the purpose.^ In the same way, under “ Form G ” 1,489 
reports were received, of which only 900 were used.^ To reject such 
a large number of reports discredited the representative character of 
the count, and as it appeared that many had been discarded merely 
because of the defective returns with respect to the average number 

1 Supplemental Statement, Oct 20, 21, 1911, pp. 20-22; Id., Brief Series, No. 11 (Table 
14), p. 23. 

a Exhibits 162, 163, Typewritten Record, p. 2365. 

eid. 



70 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

of handlings per piece, it was suggested that the department compile 
new tables including all the reports received. This was done, the 
new tables including all but 277 of the reports under “ Form F ” and 
all but 11 under “ Form G; these, it is said,being omitted on account 
of irregularities.^ In the new tables, in addition, there was an ap¬ 
portionment of expenditures in fourth-class offices based upon reports 
of time from a large number of offices of that class made from a count 
during the 30 days of September, 1911. But here, again, an 
unfortunately large proportion of the reports were found to be 
irregular, 2,353 being used, while 1,582 were rejected and 337 more 
came in too late for the compilation.^ 

The following table shows the distribution of the items embraced 
in the general post-office expenses among the different classes of post 
offices: ® 


1 For the first tables and a description of the method of computation see Supplemental 
Statement, Oct. 20, 21, 1911, pp. 20-22; Tables 14, A-1, revised, to G, revised, pp, 23-37. 
For the new tables (A-1, revised, to G, revised), see Id., pp. 47-62. The total results dif¬ 
fer very little. 

* Memorandum and lists of reports from fourth-class ofllces, submitted to the Com¬ 
mission Oct. 20, 1911. See Supplemental Statement, Oct. 20, 21, 1911, Tables A-7, A-8, 
pp. 55, 56. 

* Brief Series, No. 11 (Table 14), Supplemental Statement, Oct. 20, 21, 1911, p. 23. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER 


71 


09 

09 

a 


>5 

fO 

00" 

o . 

S a 




<» 


s' 


W >9 
►4 ^ 

pd ^ 

i-H os' 
\-^ O 


TO 

w 

hH 

w 

OQ 

Ph 

w 

>-t 

Di 

m 


ft 




s 

5si ^ 

CO ’ 

^ s 
‘S,- 

^ o 
S 

*<~> 

Is 5^ 

CO e 

*» 

^ Cji 

no ‘c^ 

•0 

o se 

^ S-. 

■M ^ 

s - 
g s 

-g CO 

■*0 

;co CO 

S ,>0 
59 

ft, e 

^ i 


w 

-o 

i 


'f 

CO 

fl 

c3 

t^ 

o 

CO 


pH 

pH 


o 

a 

O) 

(m 

0 

a> 


Ph 


^0 

<0 


a 

rQ 

3 

m 


us 


-3 

3 

C 3 


43 

be 


P? 


3) 

3 

3 

+J 

a “ 

t3 § 
oTt) 

a ® 

oS m 
•"S 3 
go 

C'S 

© fl 

3 o 

•3 “ 

o 

w 


'3 

3 

3 


i-a cci 

S « 

S O 

■2 53 

w '5 
o o 
ft-t-a 

m 

■3 O 

a 

.S-- 

tzi CO 
3 u, 
O O 


3 

m 


o 

ft 


"3 

CQ 


3 

O 

H 


• b., CO 

3 

o -t-^ ® 
S?; 3E 
® o 


8 00 CO 
W 'C* 

ooo-^ 


sa 

o 

>1 

(-< 

+J 

3 

W 


o 


I CO 

3 

o +^ ® 

^§1 


^ CO 

»H O) 

H 5 


o 

Eh 


' >»W 

§*l 


sa 

o 

>> 

l-l 

3 

H 


o 

Eh 


g&8 

Z§| 


SI 


GO r^ 

r^ c^ 00 

1-H Ci OV 


1^ o 

(M ^ 
1-H lO 


CD O 
10 <M 
O CO 


Oi O CO t^ 
CO O LO Oi 
O IM 10 ^ 

ci'c^cooo 

<N 00 r-H 
iO 05 CD 

co'^u^T 

cq 


O r-t (M o 
05 05 

CD <M CD 


05 05 O 1^ 
^ 00 <D <M 
(N to C^ 00 

to'CO' t-T rjn' 

1-H tQ 00 CO 
to CD 00 t-H 


o Q o 

O O O 05 
00 CO t> to 

i-TTf'cTci' 

^O T-i 

C^ to 1 -* 


O O O CO 

8 0 CO rH 
05 (N CD 

c^t^oTi-T 
e^^00O5 CD 
to r-» 


^a 

o 

t>> 

Ui 

0 


56 

o 


cd 

o 


S o O 
or^oo, 

00 nJH rj< 05 

QO^OOeP 
CO to o to 

CS 1-H 05 


' • rl-i 

H"' a 

CO 0.3 ;3 

.ES 1^43 O 

P'HOQEhP’H 


iS 




3 

-i-i 

O 

an 


00 


"3 

3 

ft 

X 

CD 


99 


• 1 —' » 

53 3 +j 

a-a CO . 
-2^ 0-3 
o P^ ^ 
0 

P o 

p ® 6 >-. 
c3 

0 ) CO ^ 

, 5 ^ * 0 G 52 

ofi w P 

.23 o<i a 

U-l 


3 
3 3 

5R 

3-2 

© tH 

3 

.a *3 

S3“ 
&o S 
“ 2 
■go a 

S.2 ^ 


3 

> 

ft 

3 

ft © 
>>2 

3^ 


<D 

ft 

ft 

ft 

3 

CO 


>> 


0 

>9 

+J 

0 


O 

an 


l>> 

9 h ■ 

+J W 
r 1 © 
© O 

3 !fi 

o O 

iz; 


sa 

o 


3 

W 


3 

O 

Eh 


§^2 


t/3 

fH m 

0 cl 


o 

Eh 


A >>23 
3 w ® 
o ® 

tz 

^ ® O 


t>> ce 

«H © 

if o 

r^sa 

Ho 


O 

a^ 


• >vC /5 

5^S| 


c/5 

r^sa 

Ho 


c€ 

O 

H 


I >v W 

P 

!5g| 


o 

sa 

o 

t>> 

;h 

4^ 

3 

H 


o “ 
O © 

m O 

^Sfi 

3 ° 



^ 00 


CO 00 00 (N 
O <M 

to CD (N to 

1-H to t>- 05 
t-h CD CD 
e^co t> CD 


t-h 1 ^ to to 

<N ^ 00 '^ 

0<Nrj5tO 
ca to CO CO 
to t>- 05 

^^i-ToTccT 

CN i-H t^OO 

to O 05 o 


CO 05 O CD 
to 00 jr- CD 

rH CO 

00 T-H CDC^I 
CO rH 




CO C5 <N CD 
rH (N rH 


OCDOOOO 
r- 00 CO 05 

C^ 05 00 o 


t-h 

06 o4 


Q (N 
^ (M 

(N 

to to 


<N Tfi 
to rH 


05 tH 
(M t> 
CD to 

CO i-H 
CO O 

C^^njT 

(N 


CD 1-H 
00 O 
CO 

•N 


<M O 
Tt< t>. 
00 (N 


•'rt 

•Siai 

HcqEhH 


o 

an 


























































72 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

We also give the result of the apportionment based upon the 
returns first used, as follows: ^ 

“Brief Series No. 26 (Table G, revised). —Recapitulation of apportionments of 
expenditures from Brief Series Nos. 22, 23, 24, and 25 {Tables C, D, E, and F, 
revised). 

[Revised and submitted to the Commission Oct. 20,1911.] 


1 

Classes of mail. 

2 

First-class 
post offices 
(col. 8, Ta¬ 
ble C, revised). 

3 

Second-class 
post offices 
(col. 8, Ta¬ 
ble D, re¬ 
vised). 

4 

Third-class 
post offices 
(col. 7, Ta¬ 
ble E, re¬ 
vised). 

5 

Fourth-class 
post offices 
(col. 7, Ta¬ 
ble F, re¬ 
vised). 

6 

Total of col¬ 
umns 2, 3, 4, 
and 5. 

7 

Per 

cent. 

First nla.'is . 

$29,237,460.75 

$7,860,365.51 

2,796,860.89 
89,376.03 
150,029.22 
7,748.62 

$4,568,067.45 

1,977,586.20 
317,81.5.32 
114,375.85 

$8,182,405. 71 

3,002,202.40 

400,830.09 

294,360.85 

$49,848,299.42 

13,605,764.07 
828,712.39 
1,138,080.74 
150,616.03 

62.18 

16.97 
1.03 
1.42 
.19 

Second class: 

Paid at pound rate. 

Free in county. 

Transient. 

5,829,114.58 
20,690.95 
579,314.82 
142,867. 41 

T.ncal delivery 

All second class.. 
Third class. 



6,571,987.76 
5,583,252.81 
922,357.49 
83,372.47 
432,094.62 
1,311,652.26 

3,044,014. 76 
1,680,579. 92 
219,164. 33 
30,136.35 
124,369.23 
172,365.35 

2,409,777.37 
1,039,219.06 
171,524.18 
29,430. 21 
101,757.00 
88,256.05 

3,697,393. 34 
1,705,118.01 
311,722.47 
46,952.46 
257,468.25 
289,454.08 

15,723,173.23 
10,008,169.80 
1,624,768.47 
189,891.49 
915,689.10 
1,861,727.74 

19.61 
12.48 
2.03 
.24 
1.14 
2.32 

Fourth class. 

Franked. 

Penalty. 

Foreign. 

Total. 

44,142,178.16 

13,130,995.45 

8,408,031.32 

14,490,514. 32 

80,171,719.25 
3,722,602.39 
2,498,674.71 

100.00 

Registry. 

Money order. 






Grand total. 










86,392,896.35” 









And the following is the result of the revised computation, all the 
returns being used, except as above noted: ^ 


“ Brief Series No. 26 (Table G, revised). —Recapitulation of apportionments of 
expenditures from Brief Series Nos. 22, 23, 24, and 25 {Tables C, D, E, and F, 
as revised and submitted Oct. 21, 1911). 

[Revised and submitted to the Commission Oct. 21, 1911.] 


1 

Classes of mail. 

2 

First-class 
post offices 
(col. 8, Ta¬ 
ble C, revised). 

3 

Second-class 
post offices 
(col. 8, Ta¬ 
ble D, re¬ 
vised). 

4 

Third-class 
post offices 
(col. 7, Ta¬ 
ble E, re¬ 
vised). 

5 

Fourth-class 
post offices 
(col. 7, Ta¬ 
ble F, re¬ 
vised). 

6 

Total of col¬ 
umns 2, 3, 4, 
and 5. 

7 

Per 

cent. 

First class. 

Second class: 

Paid at pound rate. 

Free in county. 

Transient. 

. Local delivery. 

All second class.. 

Third class. 

Fourth class. 

Franked. 

Penalty. 

Foreign. 

Total. 

Registry. 

$29,244,259.94 

5,974,714.13 
23,428.29 
570,200.29 
133,821.11 

$7,930,231.12 

2,782,626.59 
93,054.71 
144,770.70 
7,956.00 

$4,567,237.66 

2,009,490.48 
313,603.82 
105,137.55 

$8,183,359.77 

3,467,550.34 

428,916.88 

217,127.27 

$49,925,088.49 

14,234,381.54 
859,003.70 
1,037,235.81 
141,777.11 

62.27 

17.76 

1.07 

1.29 

.18 

6,702,163.82 
5,571,634.43 
897,802.82 
82,235.35 
434,378.60 
1,209,703.20 

3,028,408.00 
1,647,732.84 
219,354.71 
29,235.20 
115,742.54 
160,291.04 

2,428,231.85 
1,031,631.96 
167,332.84 
30,280.04 
97,533.41 
85,783.56 

4,113,594.49 
1,592,600.15 
280,163.90 
52,659.10 
148,504.40 
119,632.51 

16,272,398.16 
9,843,599.38 
1,564,654.27 
194,409.69 
796,158.95 
1,575,410.31 

20.30 

12.28 

1.95 

.24 

.99 

1.97 

44,142,178.16 

13,130,995.45 

8,408,031.32 

14,490,514.32 

80,171,719.25 
3,722,602.39 
2,498,574.71 

86,392,896.35” 

100.00 

Money order. 






Grand total. 













1 Supplemental Statement, Oct. 20, 21, 1911, Brief Series, No. 26 (Table G, revised), 
p. 37. 

* Id., Brief Series, No. 26 (Table G, revised), p. 62. 


































































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 73 

It will be observed that according to the department’s original 
calculation second-class mail was charged with 26.88 per cent of 
$80,046,173.94 ^—that is, with $21,516,411.55; while by the new com¬ 
putation the share of second-class mail was 19.61 per cent of 
$80,171,719.25, or $15,723,173.23, which on the larger number of 
reports was raised to 20.30 per cent, or $16,272,398.16. 

It seems hardly worth while to include the subsidiary tables from 
which these later results are taken, or to criticize the details, as the 
Commission has little confidence in their accuracy. Any apportion¬ 
ment of the cost of dealing with several things indiscriminately can 
be only an approximation. At the best, therefore, a computation of 
the time occupied by clerks in dealing with one class of mail when 
they are engaged with others must be more or less inaccurate. But 
in this case, the Commission feels—after inspecting the figures from 
different post offices—that while in some cases the computations may 
have been carefully made, in others they were not. Instructions 
were issued to guide the postmasters, but the reports indicate serious 
departures. While it may be possible that the result on the whole 
is fairly near the truth, it cannot be said that it proceeds from an 
actual count or from estimates upon which we may rely. There is, 
indeed, a close correspondence between the percentages shown by the 
last two tables, but this does not justify us in disregarding the obvi¬ 
ous deficiencies of the data from which they were compiled. 

In view of the errors and inconsistencies in which the returns from 
the post offices abound—we do not extend this report to review 
them—our examination has convinced us that the computation is not 
sufficiently accurate to base an apportionment of the cost of the gen¬ 
eral post-office service. 

4. MISCELLANEOUS ITEMS. 

Special Assignable Expenditures. 

These comprise expenditures which from their very nature are 
wholly assignable to a particular class of mail—such as the manu¬ 
facture of postal cards, the employment of special counsel on second- 
class matter, transportation of foreign mails, blanks for money 
orders, etc. They embrace also items belonging to several classes 
which can, ’however, be apportioned among them. Of the latter sort 
is the manufacture of mail bags, that portion which is assignable to 
pouch and sack mail being divided according to weight among the 
different classes. Then there is the cost of manufacturing postage 
stamps, which was apportioned by the department according to the 
number of pieces of each class of paid matter to which stamps are 
affixed; the expenditure for stamped envelopes and newspaper wrap- 


1 See note 2 supra, p. 68. 




74 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


pers, 98 per cent of which was assigned to first-class and 2 per cent 
to third-class matter; the cost of canceling machines, of which 95 
per cent went to first class and 5 per cent to third class; the expense 
of redemption, which was divided among the several classes of mail 
in proportion to their percentages of the total expenditures for 
postage stamps, stamped envelopes and newspaper wrappers; and 
the cost of post-office inspectors distributed according to an estimate 
made by the chief post-office inspector. The substantial accuracy of 
these apportionments does not appear to be seriously questioned. 
The result is as follows: ^ 

“ First-class matter: 

Canceling machines_ $260, 310. 64 

Manufacture of postage stamps_ 386, 363. 76 

Manufacture of stamped envelopes and newspaper wrappers- 1, 072, 218. 48 

Distribution of stamped envelopes and newspaper wrappers- 20, 584. 38 

Manufacture of postal cards *_ 180,152. 08 

Distribution of postal cards *_ 5, 716. 59 

Ship, steamboat, and way letters *_ 124. 76 

Division of redemption_ 6, 717. 30 

Mail bags (pouches)_ 56,480.53 

Post-office inspectors_ 311, 889. 28 


Total_ 2, 300, .558. 60 


“ Second-class matter; 

Mail bags_ 136, 865. 04 

Manufacture of postage stamps_ 4, 928. 11 

Special counsel, second-class mailing privilege *- 2, 783. 33 

Per diems, division of classification *_ 3, 244. 68 

Division of redemption_ 22. 65 

Post-office inspectors_ 98,658.85 


Total_ 246, 502. 66 


“ Third-class matter: 

Canceling machines_ 13, 700. 55 

Mail bags_ 30, 216. 96 

Manufacture of postage stamps- 93, 634. 08 

Manufacture of stamped envelopes and newspaper wrappers_ 21, 882. 01 

Distribution of stamped envelopes and newspaper wrappers_ 420. 09 

Division of redemption- 526.16 

Post-ofllce inspectors- 54,103. 24 


Total- 214, 483. 09 


“ Fourth-class matter: 

Mail bags- 10, 664. 81 

Manufacture of postage stamps_ 7, 885. 00 

Division of redemption_ 35. 81 

Post-office inspectors_ 47, 738. 16 


Total_ 66, 323. 78 


“Free congressional (franked) matter: 

Mail bags- 2, 229. 49 

Post-office inspectors- 4, 243. 39 


Total- 6, 472. 88 


“ Free departmental (penalty) matter : 

Mail bags- 15 , 605. 46 

Post-office inspectors_ 4, 243. 39 

Total- 19, 849. 85 


1 Supplemental Statement, Oct. 20, 21, 1911, pp. 38-40; Exhibit 200, pp. 43-48. The 
items with an asterisk (*) are directly assignable. The other items are apportioned. 

























































REPORT OF COMMISSION ON SECOND-CLASS MATTER 


75 


Foreign mail service : 

Mail bags *_ 

Division of foreign mails. Post Office Department •_ 

Division of foreign mails, auditor’s office *_ 

Transportation of foreign mails *_ 

Balance due foreign countries •_ 

Total_ 

“ Registered mail: 

Mail bags *_ 

Manufacture of postage stamps_ 

Indemnities for loss of registered mail *_ 

Division of registered mails (salaries and per diem)*_ 

Division of redemption_ 

Registered package, tag, official and dead-letter envelopes * 

Blanks, blank books, etc., for registry system *_ 

Post-office inspectors_ 


$16, 089. 08 
17, 003. 00 
3, 000. 00 
2, 218, 418. 69 
138, 052. 82 

2, 391, 563. 49 


31, 343. 30 
1, 235. 11 
1,461. 67 
41, 659. 37 
5. 85 
109, 556. 86 
3, 030. 81 
305, 524. 20 


Total- 493 , 817 . 17 


“ Money-order service: 

Payment of money orders more than 1 year old *_ 378, 010. 97 

Legislative, executive, and judicial act— 

Post Office Department *_ 63, 427. 64 

Auditor’s office *- 536, 440. 00 

Stationery *—-- 20 , 000. 00 

Blanks, etc., for money-order service *_ 198, 968. 65 

Money-order stamps *- 5 , 000. 00 

Post-office inspectors_ 80, 624. 44 


Total- 1,282,471.70 

“ Special-delivery service: 

Car fare for messengers *_ 9, 403. 24 

Fees to messengers *_ 1 , 098, 761.11 


Total- 1,1 08, 164. 35 

“ RECAPITULATION. 


First class_'_ 2, 300, 558. 60 

Second class- 246, 502. 66 

Third class_ 214, 483. 09 

Fourth class_ 66,323.78 

Free congressional (franked)_ 6,472.88 

Free departmental (penalty)_ 19,849.85 

Registry._ 493, 817. 17 

Foreign_ 2,391,563.49 

Money order_ 1, 282, 471. 70 

Special delivery- 1, 108,164. 35 


Total_ 8,130,207.57' 


The sum of $246,502.06, assigned to second-class matter, was further 
divided by the department among its subclasses in the following 
manner: ^ 


Subclass. 

Manufacture 
of postage 
stamps and 
Division of 
Redemption. 

Special 
counsel and 
post-office 
inspectors. 

Mail bags 
and per 
diems. Divi¬ 
sion of Classi¬ 
fication. 

Total. 

Pai(J at p^nnrl rate,..... 


$101,442.18 

$125,552.32 
9,429.39 
4,357.41 
770.60 

$226,994.50 

9,429.39 

8,401.69 

1,677.08 

FreCrincf>nTity -- _-___ 


Tran^i^^fi^^ __..... 

$4,044.28 
906.48 


Local d^'livpry _..... 


Total. 


4,950.76 

101,442.18 

140,109.72 

246,502.66 



1 Supplemental Statement, Oct. 20, 21, 1911, p. 41. 




































































76 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

Miscellaneous Nonassignable Expenditures. 

These include all overhead outlays which from their nature can 

%/ 

not be assigned to any particular class or special service. They are d 

“ Office of the Postmaster General: 

Advertising_ $4, 456. 64 

Post-office inspectors (administration, salaries, etc.)- 153,822.95 

Rewards- 1 -»--— 1, 938. 84 

Miscellaneous items_ 228. 35 


Total_ 160, 446. 78 


“ Office of the First Assistant Postmaster General: 

No amount. 

“ Office of the Second Assistant Postmaster General: 

Mail bags_ 149, 004. 33 

Mail locks and keys_ 44, 736.10 

Rent and equipment, buildings for Post Office Department_ 43, 511. 31 

Miscellaneous items_ 805. 58 

Freight on railroads_ 211, 497. 07 


Total_ 449, 554. 39 


“ Office of the Third Assistant Postmaster General: 

Miscellaneous items_ 802.34 


“ Office of the Fourth Assistant Postmaster General: 

Stationery for postal and money-order service ($20,000 assigned 

to money-order seiwice)_ ’74,059.75 

Registered package, tag, official, and dead-letter envelopes ($109,- 

558.86 assigned to registry service)_ 87, 612. 10 

Postmarking, rating, and money-order stamps ($5,000 assigned to 

money-order service)_ 29,979.79 

Letter balances, scales, and test weights_ 7, 814. 85 

Wrapping paper_ 10,141. 03 

Wrapping twine_ 280, 378. 09 

Packing boxes, sawdust, paste, and hardware_ 2, 500. 00 

Printing facing slips_ 42, 746. 36 

Typewriters, copying presses, etc_ 78, 699. 74 

Shipment of supplies_ 40, 674. 99 

Miscellaneous items_ 520. 30 

Distribution of official envelopes_ 2, 852. 06 


Total- 657, 979. 06 


“ Legislative, executive, and judicial act; 

Post Office Department-:_ 1,489,931.54 

Auditor’s office- 285, 430. 00 

Assistant Attorney General for the Post Office Department_ 5, 000; 00 


Total- 1, 780, 361. 54 


“ Recapitulation : 

Office of the Postmaster General_ 160, 446. 78 

Office of the Second Assistant Postmaster General_ 449, 554. 39 

Office of the Third Assistant Postmaster General_ 802. 34 

Office of the Fourth Assistant Postmaster General_ 657, 979. 06 

Legislative, executive, and judicial act_ 1, 780, 361. 54 

Total- 3, 049, 144. 11 ” 

This sum was distributed by the department among the several 
classes of mail according to the percentage apportioned to each class 
of the total amount of the expenditures for transportation, post- 
office car service, railway mail service, rural delivery service, gen¬ 
eral post-office service and directly assignable items. There was thus 


1 Supplemental Statement, Oct. 20, 21, 1911, pp. 41, 42. 





















































REPORT OF COMMISSION ON SECOND-CLASS MATTER. 77 

assigned to second-class matter, according to the original calculation 
of the department, 38.12 per cent; ^ and by its last revision 34.21 per 
cent (or $1,043,112.20), 30.85 per cent (or $940,660.96) being the 
share of pound-rate matter.^ 

In the absence of a sufficient basis for an apportionment of the 
cost of the general post-office service, we are unable properly to dis¬ 
tribute these miscellaneous expenses. 


Summary of apportionment of cost for the fiscal year 1908. 

Of the total cost for the fiscal year 1908 ($210,105,495), we con¬ 
sider that the following amounts, upon the evidence before us, may be 
apportioned among the different classes of mail: 


Railroad transportation_$44,267, 507.13 

Other transportation_ 11, 898, 222.37 

Railway post-office car service_ 4,638,971.51 

Railway mail service_ 17,373,336.92 

Rural delivery service_,_ 34,355, 209. 04 

Miscellaneous expenses, directly assignable_ 8,130,207.57 


Total_ 120, 663, 454., 54 

There is no sufficient basis for the apportionment of the remaining 
amounts, to wit: 

General post-office service_$86, 392, 896.35 

Miscellaneous expenses, not directly assignable_ 3,049,144.11 


Total_ 89,442, 040. 46 

If we divide the first-mentioned items among the classes of mail 
in accordance with the foregoing computations, the amounts attribu¬ 
table for these services to paid-at-the-pound rate, free-in-county, 
and transient matter aggregate $47,781,333.07. 

Of this total, the share of paid-at-the-pound-rate matter is 
$43,922,127.55. 

And if the amount thus assigned to pound-rate matter be applied 
to the entire weight of such mail, as estimated for the year on the 
basis of the six months’ weighings, July 1 to December 31, 1907, or 
704,216,208 pounds (which is somewhat in excess of the actual 
weight^), the cost per pound would be approximately 6.237 cents, 
exclusive of the general post-office expenses and miscellaneous items 
not apportioned. 

This, of course, does not mean that each pound of such mail occa¬ 
sions the same outlay. While over 98 per cent of the entire weight 
of pound-rate matter is treated as carried on railroads, a large part 
of it is not distributed in the post-office cars; and in the rural deliv¬ 
ery—presumably also in the star-route and other special services— 


1 Exhibit 200, p. 49. 

* Supplemental Statement, Oct. 20, 21, 1911, p. 43. 


s Supra, p. 24. 















78 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

only a fraction of the entire amount is handled. But special rates 
have not been established for the railroad, post-office car, or rural 
delivery as such. And when we seek to ascertain the average cost 
per pound of mail paid for by the pound, we must charge to each 
pound, whether of newspapers or of periodicals, its full proportion 
of the various outlays in the different branches of the post-office 
service, to the privileges of which it is entitled. 

The result is shown in the following table: 


REPORT OP COMMISSION ON SECOND-CLASS MATTER 


79 


10 

Cost per 

pound. 

$0.06237 

.04853 

.05292 


9 

Total expendi¬ 

tures appor¬ 
tioned. 

$43,922,127.55 

2,565,826.02 

1,293,379.50 

47,781,333.07 

8 

Other ex¬ 
penses 
directly 
assignable.^ 

$226,994.50 

9,429.39 

8,401.69 

244,825.58 

7 

Rural Delivery 
Service.8 

$13,491,290.59 

2,088,796.71 

182,082.61 

15,762,169.91 

6 

Railway Mail 
Service.6 

$3,651,243.94 
172,000. 75 
102,596.93 

3,925,841.62 

5 

Railway post- 
office car 
service. < 

$2,205,526.06 
104,099.12 
61,653.24 

2,371,278.42 

4 

Other trans- 
portation.3 

$4,891,503.08 

182,646.56 

150,683.41 

5,224,833.05 

3 

Railroad trans¬ 
portation.* 

$19,455,569.38 

8,853.49 

787,961.62 

20,252,384.49 

2 

Total weight 
of mail, one 
year, based 
on special 
weighing of 
1907.1 

Pounds. 

704,216,208 

52,867,236 

24,437,454 

781,520,898 

- 

Second class: * 

Paid at pound rate. 

Free in county. 

Transient. 

Total. 


^o 
p< ^ 

OT 

CQ ,aj 
<D 

m 


PQ 




xn a 
<u oj 


^ a "3 

Mw+i a 

a c^a 

o 3 a a> 

a ao 


as a ^ V 
o bco 5:1 

C T-l ^ O) 

o “ 

O CO ^ 
(y 

S'woo’S 

al^a 
a.a®a 

■a ^ 
9''^ a 0) 

05 Cj O 3 

0-0 s S 

-S2|^ 
aa^^ 

►C3 q_j 4J 

iKs 

SgsS 
a 8 ^ a 
o d, 

Cj m^3 ESaJ 

o .2i^ a o) 


^ a 

ft 

^'' a 
2 ^ 
ft o 
a ,a 

CQ OU 
® O) 


^ 1' 
S 


ft a 

a § 

03 


• W 

g a 


C3 » 
>1 ^ 
ft 'O 

a 

CQ a> 

Tf rO 


^ '*-1 _r OS 

S£sl 

a rt a» 

a 

+J 02 OK 

§ “ oT 

din 

- ,'® ^3-0 
2 o a^ 

a^.9K|3 

_r ” O) a"^ 

2 2= 
305 3 S 3q-l 
" th 'o atJ o 
. V «a ^ ®3 ^ 
ft'S jh a 02 n-g 

g'log'Sg- 

I iSgs-SssS 

” a jj "jh 
»i_i4i2 a ti 
o o s a a ^ 
a a 
a 2-2 

I a'S a t! 
^sSa^ag- 

^ 0) f1 'a ^ 5* 
a-S®23 3®* 

g 

^ 3 ^Ti 

ft^a’a-ao^o 


s 


CQ 


i-< O. 

j a ® S'* 9 ® 

« oftVa 'a® 

o 9'2t;'® “-s 
2 a 3 a <D 3 o 
at» o 2^ a 
Ht 8|’g^o 

■u ^ a a 2 -ti > 

55 (1) O-M'C tj •‘^ 

•9-2 M M-o g 
. E > W o 02 ^ 

?5 8 82*^2 
p.a 

- o a aco^ 

ft ,a2 a « a^ 
r3 PH^.d 

? *1^3^51 


























80 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

Keferring to points already noticed, it may be strongly urged that 
this apportionment unduly favors second-class mail, because it as¬ 
sumes the lower average haul for pound-rate matter shown by the 
weighings of 1906, while taking for other classes the average haul of 
mail ascertained from the weighings of 1907.^ 

On the other hand, the contention is made that second-class mail 
has been allotted a heavier share than is its due of the expense of 
railroad transportation, because this is divided on the pound-mile 
basis, without taking into account the different rates of compensation 
paid on the different routes. To repeat what has been said on this 
point,^ we have no data on which to distribute the weights of the 
mail among the routes according to the amount paid on each; and in 
view of the fact that second-class mail is carried on all routes, and 
that, as is stated by the department, a large proportion of the total 
annual compensation (about 73 per cent) is paid on routes carrying 
an average of over 5,000 pounds daily, we are not disposed to the con¬ 
clusion that injustice has been done to second-class mail by the use 
of the pound-mile method of apportionment. 

Again, the apportionment of the expense of “ Other transporta¬ 
tion” is based on a supposed correspondence between the ratios of 
mail and equipment for the different classes in these services and in 
railroad transportation, and it is said that there is no sufficient 
ground for this assumption. The share thus attributed to pound- 
rate, free-in-county, and transient matter taken together was 45.77 
per cent.^ If this is a mere estimate, without evidence of the weights 
actually carried in these routes, still we have no reason for believing 
that it is unfair to second-class mail. A portion of this cost is for 
mail messengers and for regulation screen wagons by which the mails 
are carried to and from the railroads. Most of the remaining ex¬ 
pense of “ Other transportation ”—or nearly two-thirds of the entire 
amount—is for star-route service.^ If it be suggested as to this part 
of the outlay that a closer analogy would be found in the case of rural 
delivery than that furnished by railroad transportation, it is inter¬ 
esting to note that on a division according to an actual count of 
pieces in the rural delivery service in the month of May, 1911, the 
second-class matter (pound-rate, free-in-county, and transient) was 
found to form 45.88 per cent; and had the division been according to 
the relative weight of the classes of mail, as reported, the share of 
second-class mail would have been much greater.® 

With respect to the post-office cars, account should be taken of the 
fact that if the amount paid to the railroads for their use were ap¬ 
portioned on the basis of pieces distributed—that is, in the same 
manner as the compensation of those employed in the railway mail 


1 Supra, p. 49. 
^ Supra, p. 33. 


3 Supra, p. 56. 
* Supra, p. 54. 


6 Supra, pp. 65-67. 



EEPORT OP COMMISSION ON SECOND-CLASS MATTER. 81 

service, as suggested by the expert accountants, the amount charged 
to pound-rate matter in the foregoing summary would be $1,230,- 
633.21 less, or applied to 704,216,208 pounds, one hundred and 
seventy-four one-thousandths of a cent less per pound.^ This would 
make the cost per pound—for the items apportioned—6.063 cents 
instead of 6.237 cents. 

Many objections have been made to various points in the methods 
of computation and some of these have been argued with earnestness. 
Those which appear to the Commission to be important have been 
discussed. With the others it is unnecessary to deal in detail. The 
fact that they are not mentioned does not mean that they have been 
overlooked. It is sufficient to say that in our judgment they rest 
upon misunderstandings of the evidence or of the methods adopted 
and their significance. Some of them were based upon the assump¬ 
tion that if a result could not be proved to be exactly accurate it 
must be valueless, whereas in matters where precise accuracy is of 
necessity unobtainable an approximation must be deemed satisfac¬ 
tory if the limits of error are too small to affect the value of the 
result for the purposes for which it is used. 

Taking all these criticisms into consideration, and recognizing 
that the above apportionment can not be deemed exact, we are satis¬ 
fied that the approximation is close enough to the fact to be a basis 
for judgment, and that in the fiscal year 1908 the share of second- 
class mail paid at the pound rate for the services of transportation, 
post-office cars, railway distributions, rural delivery, and other ex¬ 
penses directly assignable—distributed over all the matter of that 
sort handled in the mails during that year—was not less than 6 
cents a pound. 

It should be added that although we have not been able, because of 
the uncertainty attaching to the reports from the post offices, to ap¬ 
portion the cost of the general post-office service, it is evident that 
second-class mail has a share of that cost. The department in its 
revised tables estimated the portion attributable to pound-rate mat¬ 
ter to be 16.97 per cent of $80,171,719.25, or $13,605,764.07; ^ and it 
also allotted to pound-rate matter out of the miscellaneous expenses 
of a general character the sum of $940,660.96.® These two items 
aggregate $14,546,425.03 out of the total of $89,442,040.46 of the ex¬ 
penses for general post-office service and miscellaneous items not di¬ 
rectly assignable,^ These amounts applied to the estimated 704,216,- 
208 pounds would be slightly in excess of 2 cents a pound. Owing, 
however, to the obvious deficiencies of the data from which these fig¬ 
ures were compiled, we are not willing to hazard a guess as to what 

1 Supra, p. 60. ^ Supra, p. 72. « Supra, p. 77. ^ Id. 

29552°—12-7 





82 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


proportion of this amount of 2 cents a pound would constitute a 
proper charge against pound-rate matter or whether it would be 
‘more than 2 cents.^ 

It is hardly necessary to say that we have been dealing with the 
actual expenses of the department as reported for the fiscal year 
1908, and not with what the cost should be, or might be, under any 
other conceivable arrangements for transportation and handling or 
any possible change in the statutory definition of mailable matter. 
Nor has any amount been charged to any part of the mail for the 
investment in land and buildings owned by the United States and 
devoted to post-office purposes. 

General considerations of cost. 

Arguments have been presented to the Commission against the 
general principles upon which the foregoing apportionment of cost 
is based. 

First. It has been stated by counsel for the publishers, and evi¬ 
dence has been introduced in support of this statement, that the ad¬ 
vertisements in periodicals stimulate a large amount of first-class 
mail which yields a profit to the post office; and that on ordinary 
business principles second-class mail should be credited with the 
profits realized upon the business that it produces. 

It may be answered that first-class mail also stimulates the volume 
of its own class and all other classes, and that third-class matter 
has the same effect, but any attempt to determine the extent to which 
each class of mail provokes letters would be hopeless. Data could 
not possibly be obtained for a computation of this sort, nor if they 
could, is it clear whether they would increase or reduce the cost 
apportioned to second-class mail. If the argument that advertise¬ 
ments in magazines produce large quantities of first-class mail be 
deemed to rebut a suggestion of a special rate upon their advertis¬ 
ing sections, still it is ineffectual with respect to the cost of pound- 
rate matter taken as a whole. 

Furthermore, first-class mail, in which the Government holds a 
monopoly, ought not permanently to be highly profitable, and if 
found to be so, consideration should be given either to the reduction 
of the rate of first-class postage as suggested by the Postmaster 

iRy its original calculation the department’s estimated cost per pound of second-class 
mail was 9.235 cents. (Exhibit 200, p. 52.) On its revised computation this was reduced 
to 8.263 cents a pound for second-class mail as a whole and 8.386 cents a pound for 
pound-rate matter (Supplemental Statement, Oct. 20, 21, 1911, p. 46) ; and on its appor- 
tiohment of the general post-ofhce expenses according to the larger number of returns 
from post offices (supra, p. 70) it attributed to second-class mail 8.333 cents a pound 
an<\ to pound-rate matter 8.476 cents a pound. (Id., p. 66.) 



REPORT OF COMMISSIOISr ON SECOND-CLASS MATTER. 83 

General/ or the profit should be returned to the public through en¬ 
larged postal facilities.^ 

Second. Another criticism proceeds on the assumption that it is 
the duty of the Government to carry letters and that all other classes 
of mail should be charged only the increased cost above that which 
would be caused by letter mail if carried alone. 

With such an assumption we can not agree. All classes of mail 
are carried for the common convenience of the public, and in de¬ 
termining the apportionment of cost, each should be charged with 
its proper share of the total expense. 

Third. Again it is urged that the rates made by common carriers 
for the transportation of different classes of merchandise are not 
based upon an equal division of the whole expense, due to fixed 
charges, maintenance and operation, but that other matters are 
taken into account. 

Without attempting to state what may or may not be permissible 
considerations in establishing railroad tariffs, it is sufficient to say 
that the argument, save so far as the differentiation in charges reflects 
differences in the expense of transportation, bears upon the question 
of rates rather than upon the apportionment of cost. We are at 
present concerned with the latter, to the end that the problem of 
fixing rates for second-class mail may be approached with a proper 
understanding of the expense of the service for which the charge is 
to be made. In order to allocate the cost, it is manifestly necessary 
to determine, in connection with the outlays in each branch of the 
service, what practicable method of distribution is the fairest and to 
apply that method in ascertaining the proportionate expense of 
each class of mail. For this purpose the expert accountants em¬ 
ployed by the congressional committee reviewed the entire subject 
and made their recommendations, and the department obtained its 
special data and submitted its calculations. These recommendations 
and computations we have carefully considered, and our conclusions 
with respect to the apportionment, including the methods adopted 
and the amounts to be charged to each class of mail, so. far as the 
evidence justifies a division, have been stated. These results can not 
be affected by any principle of fixing rates, for they deal solely with 
cost and not with rates. 

In the search for some other basis for distributing cost, we have 
been referred to the territorial transit rates fixed by the Universal 
Postal Convention of the 26th of May, 1906. It was provided by 
this convention that articles exchanged in closed mails between two 
administrations of the union by means of the services of one or of 
several other administrations of the union should be subject to the 


1 Exhibit 200, Statement of Postmaster General, p. 7. 


8 la., p. 6. 



84 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

following transit charges to be paid to each of the countries tra¬ 
versed or whose services participated in the conveyance.^ 

a. 1 franc 50 centimes per kilogram ($0.1313 per pound) for letters and post 
cards and 20 centimes’ per kilogram ($0.017506 per pound) for other articles 
for any distance not exceeding 3,000 kilometers (1,864 miles). 

&. 3 francs per kilogram ($0.26213 per pound) for letters and post cards and 
40 centimes per kilogram ($0.034947 per pound) for other articles for any dis¬ 
tance exceeding 3,(XX) kilometers (1,864 miles) and not exceeding 6,000 kilome¬ 
ters (3,728 miles). 

It has been suggested that this may be taken to indicate an interna¬ 
tional opinion as to the difference in cost of transporting first-class 
and other classes of mail across the countries of the different adminis¬ 
trations joining in the agreement. In fact, however, the convention 
deals with rates, and the assumption that these correspond to relative 
cost is contradicted, at least so far as this country is concerned, by 
the evidence which has been submitted. We need not pause to in¬ 
quire into the reasons which justified the reciprocal obligations of 
the convention, for its provisions neither alter the actual outlays of 
the department nor afford a basis for their proper distribution 
among the different classes of mail. 

SECOND. THE PEESENT MAIL COST OF SECOND-CLASS 

MATTEE. 

We have thus far dealt with the apportionment of the cost of trans¬ 
porting and handling the mails in the fiscal year 1908, that being the 
year in which the special data necessary for the purpose were ob¬ 
tained and with respect to which the department’s statistics were 
compiled. And even where, as in the case of the rural delivery service, 
use has been made of data subsequently obtained, these have been ap¬ 
plied to the distribution of the expense in the fiscal year 1908, so that 
for a given period there should be as complete an analysis as possible. 

But the volume of the different classes of mail and the expenses 
of the department vary with the years, and the cost per pound of 
pound-rate matter in one year may not be precisely the same in 
another. Although we have not the facts necessary for an appor¬ 
tionment of cost in the years after 1908, the following observations 
may be made by way of comparison: 

In the fiscal year 1909 the expenses of the department, as stated 
in its annual report, were $220,417,698.20.^ We are not able to make 
an exact comparison with the outlays of the preceding year, for the 
total amount of the latter, as taken for the purpose of apportionment, 
included certain items in addition to those given in the annual sum¬ 
mary,® and we have not the corresponding items for the succeeding 


1 Exhibit 199, Universal Postal Convention, Rome, May 26, 1906, Art. IV, p. 3. 

2 Annual Report, 1909, pp. 58, 59. 

»Supra, p. 29. See Annual Report, 1908, pp. 73, 74. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


85 


years. Omitting these items in both cases and taking the comparison 
shown by the annual report of 1909, the increase was $12,889,470.09.’ 
Of this by far the larger amount is attributable to general post-office 
expenses. Thus an increase of $8,338,026.23 is found in the three 
items of “ compensation to assistant postmasters and clerks in post 
offices,” ‘‘ city delivery,” and “ compensation to postmasters.” ^ The 
amount of pound-rate matter carried in the mails in the fiscal year 
1909 was 723,233,182 pounds,^ as against 704,216,208 pounds, the 
estimated weight for the year 1908, taken in the foregoing compu¬ 
tations.'* Excluding, then, the general post-office expenses, which we 
were unable to apportion, and comparing the other classes of outlays 
which were apportioned for 1908, we have no reason for believing 
that the cost per pound of pound-rate matter was substantially dif¬ 
ferent in the fiscal year 1909 from that of the year before. 

For the fiscal year 1910 the expenditures are stated to be $229,- 
509,680.36.® This shows an increase over the amount stated for cor¬ 
responding items of expense in the department’s summary for 1908 
($207,528,222.11) of $21,982,202. Here again we find the increase 
very largely accounted for by general post-office expenses, the items 
of “ compensation to assistant postmasters and clerks in post offices,” 
“ city delivery,” and “ compensation to postmasters,” showing in 1910 
an excess of $14,390,222.53 over 1908.® 

The following is a comparison of the outlays in 1910 with those 
which have been apportioned for 1908, exclusive of miscellaneous 
items: 



1908 

1910 

Railroad transportation. 

8 $44,267,507.13 
11,898,222. 37 
10 4,638,971.51 
17,373,336.92 
34,355,209.04 

9 $44,435,504.47 
12,241,962.47 
114,697,140.10 
19,385,096.61 
36,844.968.61 

Other transportation. 

Railway post-office car service. 

Railway mail service. 

Rural delivery service. 


112,533,246.97 

117,604,672.26 


1 Annual Report, 1909, Financial Statement No. 6, p. 369. 

2 Compare Annual Report, 1908, p. 73, with Annual Report, 1909, p. 58. 

3 Supra, p. 14. 

*With respect to the discrepancy between this estimated weight and the actual weight, 
694,865,884 pounds, see supra, p. 24. 

5 Includes payments to September 30, 1910, for service rendered prior to June 30, 1910. 
Compare statement of audited expenditures (Annual Report, 1910, p. 369), the total of 
which, as there shown, is $229,510,424.11. 

3 Annual Report, 1910, p. 42 ; 1908, p. 73. 

The figures are taken, except where otherwise stated, from the summaries in the 
annual reports. Id. We have not attempted, in the absence of a statement in the matter, 
to distribute the miscellaneous items for the year 1910, but it will be noticed that in 
1908, out of a total of $8,130,207.57 of such items found to be directly assignable, only 
the sum of $226,994.50 was attributed to pound-rate matter. (Supra, p. 75.) 

s Supra, pp. 28, 29. Includes $679,494.43 certified in favor of Central Pacific Railway 
Co., aided. Annual Report, 1908, p. 333. 

»This amount varies from that stated in the Annual Report ($44,654,515.97), 1910, pp. 
42, 368. It is taken from “A report giving the results of the inquiry as to the opera¬ 
tion, receipts, and expenditures of railroad companies transporting the mails, and recom¬ 
mending legislation on the subject,” H. Doc. No. 105, 62d Cong., 1st sess., p. 5. 

13 Includes $71,605.26 certified in favor of Central Pacific Railway Co., aided. Annual 
Report, 1908, p. 333. 

11 The amount stated in the Annual Report for 1910 is $4,686,122.27, p. 42. The 
amount stated above ia taken from the report on railway operations (see note 9). 













86 EEPORT OP COMMISSION ON SECOND-CLASS MATTER. 

Pound-rate matter carried in the mails in the fiscal year 1910 
amounted to 817,772,900 pounds, an increase of 113,556,692 pounds 
over the estimated weight taken in the foregoing computations for 
the fiscal year 1908.^ Despite this large addition and presumably, as 
indicated by the revenues, a considerable increase in other classes of 
mail, it will be observed that the entire expense for railroad trans¬ 
portation in 1910 was very slightly in excess of the amount shown 
for 1908. This is partly explained by the fact that the outlays for 
railroad transportation respond slowly to increases in weight, as the 
railroad pay is based upon the average weights appearing in quad¬ 
rennial weighings and the weights are taken in only one section 
annually. Further, by the order of the Postmaster General of June 
7, 1907, it was provided that when the weight of the mails was 
taken on railroad routes the whole number of days included in the 
weighing should be used as the divisor for obtaining the average 
daily weight; formerly Sundays were excluded. This ruling was 
operative as to one section only in the fiscal year 1908, but after 
weighings in two more sections an additional saving of about 
$1,500,000 was effected, and it is stated that a further reduction for 
the fiscal year 1911 by the weighing in the fourth section amounted 
to $1,600,000.2 

In the apportionment for 1908 (after allowing to pound-rate 
matter the lower average haul shown by the returns of 1906, and 
making other changes in the department’s computation, which have 
been explained) the proportion of the entire expense of railroad 
transportation attributed to pound-rate matter was 43.95 per cent.^ 
Assuming that its proportionate share of the outlays for railroad 
transportation in the fiscal year 1910 was the same—and in view of 
the increase in weight this assumption can not be said to be preju¬ 
dicial to pound-rate matter—its portion would be $19,529,404.21. 
This would represent an average charge upon all pound-rate matter 
for the cost of this service, on the basis of 817,772,900 pounds in 
the mails, of 2.388 cents a pound, instead of an average charge of 
2.763 cents a pound attributed to the estimated weight of 704,216,208 
pounds in the summary of the apportionment for 1908.^ 

If, further, w^e take the outlays for the fiscal year 1910 in the 
services mentioned in the above comparative statement (transporta¬ 
tion, post-office cars, railway mail service, and rural delivery 
service), amounting to $117,604,672.26, and assume that pound-rate 
matter had the same proportionate share of this total amount as 
it had of the aggregate of the corresponding items for the fiscal 


1 The excess over the actual weight was 122,907,016 pounds. Supra, p. 14. 

2 Annual Report, 1910, p. 131. 

2 Table 5, supra, p. 52. 

* The share of pound-rate matter of the cost of railroad transportation is stated in that 
summary as $19,455,569.38. Supra, p. 79. 



REPORT OP COMMISSION ON SECOND-CLASS MATTER. 


87 


year 1908,^ its share would be $45,630,612.84, or, distributed over 
817,772,900 pounds, an average of 5.58 cents a pound, as against a 
charge of 6.205 cents a pound for these services in 1908.^ 

This is exclusive of the general post-office expenses and miscel¬ 
laneous items. 

We have not before us similar statistics for the fiscal year 1911.^ 

Various economies have been introduced and others are now being 
made. Notable among these is the transportation of certain peri¬ 
odicals by freight instead of by mail trains, which was begun in the 
third contract section in September, 1911. The department stated 
to the Commission, during the course of the hearings, that it expected 
to effect a saving in that section of $800,000 a year, estimating on that 
basis that when applied over the whole country the annual saving 
would aggregate $3,200,000.* * It now appears that, if the movement 
by freight should be continued throughout the year on the same basis 
as in September last, there would be a saving in the third contract 
section of over 50 per cent above the original estimate, or $1,237,- 
459.98.® A reduction in transportation cost of $1,200,000, if applied 
to 800,000,000 pounds of pound-rate matter, would mean IJ mills 
per pound. As to the probable saving throughout the entire country 
when the movement is fully inaugurated the department states that 
it has no further information than that submitted.® However, it may 
be regarded, as unlikely that there will be a saving at the same rate in 
the three other contract sections on account of the differences which 
they present.'^ 

In the absence of data for a precise allocation of present outlays, 
we are of opinion, upon the facts which have been reviewed, that a 
fair estimate of the present cost of pound-rate matter for the services 
above mentioned is approximately 5J cents a pound, and that, if 
other conditions continue to be the same, the extension of the method 
of shipping periodicals by freight will further reduce this cost to 
an amount slightly in excess of 5 cents a pound. 

To obtain the total cost it would be necessary to add the share of 
pound-rate matter in general post office and miscellaneous expenses. 
We repeat that we have not been able, because the necessary facts 
are not available, to make an apportionment, even for the year 1908, 

1 Supra, p. 79. 

2 Including miscellaneous items directly assignable, the charge for 1908 was 6.237 cents 
a pound. Supra, p. 79. 

2 It may be said, however, that the total pound-rate matter for the fiscal year 1911 was 
893,296,908 pounds and the free-in-county matter 57,704,761 pounds. Report of Third 
Assistant Postmaster General, 1911, p. 36. 

* Typewritten Record, p. 700. 

B “ Memorandum of October 28, 1911, on behalf of the Post OflSce Department in reply 
to ‘ Memorandum filed on behalf of the publishers of certain magazines,’ ” p. 34. 

«Id. 

’ See as to application of new divisor, Annual Report, 1910, p. 131; as to pound-miles 
paid for. Typewritten Record, p. 2135, Exhibit 152. 



88 REPORT OE COMMISSION ON SECOND-CLASS MATTER. 

of the general post-office expenses and the miscellaneous outlays 
not directly assignable, and we have no basis for estimating how 
much of this cost should be assigned to pound-rate matter. 

It should be observed that there are changes pending in connection 
with schemes furnished by the department for the separation of 
pound-rate matter by publishers to reducfe the handlings required in 
the service. With respect to this matter the department says: 

In regard to tbe saving which will be effected by the improvement in the 
separation of the mails by the publishers as above mentioned, some consider¬ 
ation should be given on this account, but the change has not gone into effect 
sufficiently in extent or in time to enable the department to make an intelligent 
estimate as to saving. ^ 

It further appears that as a result of the recent inquiry as to the 
operation, receipts, and expenditures of railroad companies trans¬ 
porting the mails, the department has suggested changes in the 
method of payment by which the present practice of fixing railway 
mail pay in accordance with weight would be entirely abandoned, 
and railroads would be paid according to the amount of space re¬ 
quired in cars for the distribution and carriage of the mails on the 
basis of ascertained cost and 6 per cent thereof additional.^ It is 
estimated that through this readjustment there would be a saving of 
about $9,000,000 in the annual outlay. In the apportionment for 
1908 (after making the various changes noted) the share of second- 
class mail paid at the pound ra{e was 43.95 per cent of the compensa¬ 
tion paid to the railroads on the basis of weight and 44.29 per cent of 
the total amount paid for transportation and for the use of post- 
office cars.® Assuming that it would have the same share of the total 
outlay under the new system, the amount of the estimated saving to 
be assigned to pound-rate matter would be about $3,986,100. To this 
there would be added whatever might be saved by freight shipments, 
as it is proposed that these should be paid for according to the 
freight tariffs approved by the Interstate Commerce Commission. 
It should be remembered that the saving on freight shipments, here¬ 
tofore mentioned, for the current year is based on the present method 
of paying the railroads by weight; and we have no figures for a 
definite calculation as to the difference between freight charges and 
the compensation which would be paid on the basis of cost and 6 
per cent. However, it may be estimated, in a general way, that the 
total saving on pound-rate matter (if the new arrangement were 
made), including freight shipments, would be considerably less than 
1 cent a pound. 

1 Memorandum of Oct. 28, 1911, p. 34. 

3 Letter from the Postmaster General submitting a report giving the results of the in¬ 
quiry as to the operation, receipts, and expenditures of railroad companies transporting 
the mails, and recommending legislation on the subject, H. Doc. No. 105, 62d Cong., 
1st sess. 

3 See supra, pp. 52, 59. 



REPOET OP COMMISSION ON SECOND-CLASS MATTER. 89 


But this change is still in the future and dependent upon new 
legislation; it cannot enter into the findings of present cost. The 
same may be said of other changes discussed in argument during the 
hearings—including the establishment of a parcel post—and it is 
impossible at this time, with respect to the apportionment of cost, 
accurately to estimate their effect. 

FINDINGS AS TO COST. 

Summarizing our conclusions, and responding to that portion of 
the joint resolution of March 4, 1911, which directed the Commission 
“ to make a finding of what the cost of transporting and handling 
different classes of such second class mail matter is to the Govern¬ 
ment,” we report— 

First. That the evidence submitted does not justify a finding of the 
total cost of transporting and handling the different ,classes of 
second-class mail matter. 

Second. That the evidence submitted is sufficient to warrant a find¬ 
ing of the approximate cost of the different classes of second-class 
mail known as paid-at-the-pound-rate, free-in-county, and transient 
matter, exclusive of their shares, respectively, of the general post- 
office expenses and miscellaneous items not directly assignable; that 
is to say, the approximate cost of such mail matter for the services 
of transportation, post-office cars, railway distributions, rural deliv¬ 
ery and certain miscellaneous items directly assignable. 

Third. That there is no evidence upon which a finding can be made 
as to the cost for the services above mentioned of other subdivisions 
of second-class mail; that is, of the different sorts of newspapers and 
periodicals. 

Fourth. That in the fiscal year 1908, for which the department’s 
statistics were compiled, the cost of the subclasses of second-class 
mail known as paid-at-the-pound-rate, free-in-county and transient 
matter for the services of transportation, post-office cars, railway dis¬ 
tributions, rural delivery and certain miscellaneous items directly 
assignable, was as follows: 

Paid-at-the-pound-rate matter,approximately-6 cents a pound; 

Free-in-county “ -5 “ “ “ ; 

Transient “ -- 5 “ “ “ . 

Fifth. That upon the basis of the apportionment for the fiscal year 
1908, as modified by subsequent reductions in the expense of railroad 
transportation, the cost of paid-at-the-pound-rate matter for the 
services above mentioned is approximately SJ cents a pound. 


90 BEPOET OF COMMISSION ON SECOND CLASS MATTER. 

That, by the extension throughout the country of the method re¬ 
cently introduced of transporting certain periodicals by freight 
instead of the usual mail trains, the cost of paid-at-the-pound-rate 
matter will be further reduced; that this saving cannot be precisely 
estimated at this time, but it is probable that when it is fully effected, 
and if other conditions remain substantially unchanged, the cost 
of paid-at-the-pound-rate matter for the services above mentioned 
will be slightly in excess of 5 cents a pound. 

Sixth. That there is no evidence that the cost either of free-in- 
county or of transient matter for the services above mentioned is 
substantially different from that found for the fiscal year 1908. 

Seventh. That to obtain the total cost of transporting and handling 
the subclasses of second-class mail, known as paid-at-the-pound-rate, 
free-in-county and transient matter, it would be necessary to add to 
the ascertained cost for the services above mentioned, the shares of 
these subclasses, respectively, in the general post-office expenses and 
miscellaneous outlays not directly assignable, for the proper appor¬ 
tionment of which the Commission is without adequate data. 

RATE THAT WOULD COMPENSATE THE GOVERNMENT. 

The joint resolution also directed the Commission to report-“what 
in their judgment should be the rate for the different classes of 
second class postal matter, in order to meet and reimburse the Gov¬ 
ernment for the expense to which it is put in the transportation and 
handling of such matter.” 

In considering this question, it must be remembered that the Gov¬ 
ernment has no monopoly in the case of second-class matter. Any 
part of the transportation or distribution of this sort of matter which 
may be profitable is therefore open to the competition of private 
agencies. The least expensive part of the service is, of course, the 
carriage in bulk of newspapers and periodicals sent by publishers to 
newsdealers. So long as the Government transports and delivers 
second-class mail at the same rate throughout the United Stafes, 
the shorter hauls without distribution of individual pieces will cost 
less, and hence be more remunerative than the longer hauls and the 
scattered distribution; and, there being no monopoly, private enter¬ 
prise is certain to compete for any portion of the business which 
may afford a profit, leaving to the post office that which costs more 
than it returns. "When packages are limited in size it may not be for 
the interest of private concerns to compete and there may be a profit, 
as apparently in the case of fourth-class mail; but where an un¬ 
limited amount can be sent at the same rate per pound, an oppor- 


HEPORT OF COMMISSION ON SECOND-CLASS MATTER. 91 

tunity is offered—^the extent of which, of course, depends upon the 
amount of the post-office charge—for competition for shipments in 
bulk. 

How far competition is carried under the present rate of 1 cent a 
pound appears from the report dated July 1, 1910, prepared by the 
Bureau of Statistics and Accounts of the Interstate Commerce Com¬ 
mission,^ as follows: 

“ The transportation of daily newspapers by express companies also is subject 
to peculiar rules affecting tbe rates. Daily newspapers, if shipped by publishers 
or news companies and forwarded on the day of issue, are carried for one-half 
cent per pound for each carrying company between all points where the mer¬ 
chandise rate does not exceed $4.50 per 100 pounds, when no wagon service is 
rendered either in receipt or in delivery, and when special mail or newspaper 
trains are not used. When wagon service is rendered, or when special mail or 
newspaper trains are used, 1 cent per pound is charged for each company. 
Under the application of this rule, the charge on a 50-poiind package of daily 
papers from New York to Kansas City, if collection and delivery service were 
rendered, would be 50 cents. If no wagon service were rendered, the charge 
would be 25 cents. The charge on a package of merchandise of the same weight 
between the same two points would be $2.25. 

“ Charges on newspapers other than those published daily, magazines, and 
similar publications which are registered in the post-office as second-class 
matter, if shipped by publishers or news companies, must be prepaid, except 
that returned shipments may bo forwarded ‘ collect ’ when guaranteed by 
consignee. Between points in what may be called the Atlantic States, where 
the merchandise rates do not exceed $4.50 per 100 pounds, the rate is 1 cent 
per pound, minimum 10 cents per package for each carrying company, except 
between points where a single graduate is authorized. Between points both of 
which are in the States called in the official express classification ‘ Territorial 
group No. 2,’ and which comprises 31 States, including Alabama, Arizona, 
Louisiana, Michigan, Nebraska, Ohio, Oklahoma, Texas, Utah, and Wyoming, 
this rate also applies between all points where the merchandise rate does not 
exceed $4.50 per 100 pounds. Between points in the Atlantic States and those 
in group No. 2, or between all points where the merchandise rate exceeds $4.50, 
merchandise pound rates apply, with a minimum charge of 25 cents. The work¬ 
ing of this rule may be illustrated by a comparison. The charge on a 50-pound 
package of magazines from New York to Atlanta, Ga., with both collection and 
delivery service furnished, would be 50 cents. On a package of merchandise 
of the same weight between the same points the charge would be $2. The 
express rules for rates on newspapers, magazines, and the like may be due to 
the competition existing between the post-office and the express companies for 
this class of freight.” 

It will be observed that the express companies do not now under¬ 
bid the post office, save in the case of daily newspapers shipped by 
publishers or news companies and forwarded on the day of issue, 
where the rate between certain points is one-half cent a pound for 

1 Exhibit 14, “ First annual report on the statistics of express companies in the United 
States for the year ending June SO, 1909,” pp. 14, 15; see also Exhibit 15, “Official ex¬ 
press classification. No. 19,” issued July 1, 1909, effective Aug. 1, 1909, p. 19 ; Typewritten 
Record, pp. 579-581. 



92 


REPOET OP COMMISSION ON SECOND-CLASS MATTER. 


each carrying company, when no wagon service is rendered. We 
are also informed by the Second Assistant Postmaster General that 
the railroad companies have “ what they call a baggage rate for news¬ 
papers, which is one-half a cent a pound over the line of the road 
carrying, and that means over the particular corporate line, not a 
system; and most of that mail is carried on what are known as 
newspaper trains that are made up by the companies for the pur¬ 
pose of carrying the great daily papers out of large centers in very 
expeditious time.”^ 

In the case of newspapers other than daily, and of magazines 
and other periodicals, the rate between the described points is 1 
cent a pound, with a minimum rate of 10 cents per package for each 
carrying company, except where a single graduate is authorized. 
The express classification adds: “All publications not registered in 
the United States Post Office as second class matter must be charged 
for at merchandise or Section D rates.” ^ 

It has been urged that the fact that these rates are made, taken 
into consideration with the large percentage of receipts which is 
paid by the express companies to the railroads for express privileges, 
indicates that the charge to the post office for railroad transportation 
is too high. The subject of railway mail pay is not within our prov¬ 
ince, but it may be suggested that it should be ascertained whether or 
not by virtue of the present system the post office pays, under similar 
conditions, a higher rate than that charged to private concerns; and 
if so, the situation should be remedied. 

It is apparent, however, that if the postal rate were increased and 
that of the express companies should remain the same, these com¬ 
panies would have the carriage of all bulk shipments of second-class 
matter, not requiring for its distribution the special facilities of the 
post office, between the points described in the express classification. 
And the increase, according to its amount, would extend the zone of 
competition. 

This must necessarily be the case unless different prices are 
charged for different distances or services; in other words, unless 
zone rates or other differentials are established. The policy of zone 
rates was pursued in the earlier history of our post office and has 
been given up in favor of a uniform rate in view of the larger inter¬ 
est of the Nation as a whole. It would seem to the Commission to be 
entirely impracticable to attempt to establish a system of zone rates 
for second-class matter. 


1 Typewritten Record, p. 581. 

2 Exhibit 15, p. 19. Section D rates are those, between certain points, which may be 
said to correspond in a general way (but with a certain minimum charge) to third-class 
postal rates; Exhibit 15, p. 25. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 93 

^ Nor is it advisable, in our opinion, to adopt a scheme of differen¬ 
tial charges for matter now in the pound-rate subclass, with the ob¬ 
ject of making a difference in rates with respect to the services 
rendered. Probably the clearest line of division would be that of 
shipments of newspapers and periodicals in bulk; that is, in packages 
over a prescribed minimum to be delivered unbroken to the ad¬ 
dressee. But even in such case, unless zones were created, there 
would be wide disparities in service, as for example between ship¬ 
ments from New York to Philadelphia and those from New York to 
Seattle. Any attempt, therefore, to establish differential rates for 
newspapers and periodicals mailed by publishers, proportional to 
the service rendered, would fall so far short of its purpose as to 
leave unjustified the complications of an elaborate schedule with its 
attendent inconveniences. Progress in the post office, with respect, 
both to economy in administration and to public convenience, leads 
away from a variety of differential charges to uniform rates and 
broad classifications. 

But, to repeat, it is clear that, under a uniform rate, competition 
in the more profitable part of the business is unavoidable; unless the 
second-class privilege were restricted to those publishers who send 
through the post office all copies of their publications requiring rail¬ 
road transportation. The Commission does not recommend an effort 
to monopolize the carriage of newspapers and periodicals, and hence, 
in considering the adequacy of new rates to reimburse the Govern¬ 
ment, account must be taken of changes in condition which would 
result if the area of competition were enlarged. 

It must also be noted that a rate based upon the estimate of pres¬ 
ent cost would doubtless be prohibitive for a large number of publi¬ 
cations which are dependent upon the facilities of the post office and 
could not exist under a heavy increase of rates. 

In short, our conclusion is that, if a rate were established com¬ 
mensurate with the present estimate of cost, it would dislocate this 
part of the service and produce such entirely new conditions that a 
new computation of cost would be necessary, in the light of which 
alone could it be determined whether the rate furnished the desired 
correspondence between income and outlay as to this sort of mail. 
And it follows that, if for the reasons stated a rate equivalent to the 
cost estimated under present conditions cannot be regarded as satis¬ 
fying the requirement, the suggestion of another rate which would 
fairly meet and not exceed the outlays of the Government must 
necessarily rest on conjecture. 

We are, therefore, of opinion that, as the Government has no 
monopoly of second-class matter and in view of the changes which 
inevitably would follow if rates were greatly increased, it is im- 


94 


BEPOBT OF COMMISSION ON SECOND-CLASS MATTEB. 


possible to report, with any satisfactory approach to accuracy, what 
charge for the different classes of second-class mail would “meet 
and reimburse the Government for the expense ” which it incurs 
in their transportation and handling. 

RECOMMENDATIONS. 

In what has been said we have fulfilled, so far as we are able, the 
obligation pl.aced upon the Commission by the letter of the resolution, 
but we feel that our work would not be complete, and our duty not all 
done, without an expression of opinion on the question of an increase 
in the rates of second-class mail matter, apart from any attempt to 
suggest what rates would afford full reimbursement on the basis of 
present cost. 

There appears to be at present no deficit in the operations of the 
Post Office Department as a whole, and from the arguments sub¬ 
mitted to us it is apparent that some have supposed that the only 
reason for proposing an increase in rates was to cover a deficit. 
While postal rates should be adequate to meet the expenses of the 
department, the chief reason for an increase in the rate on second- 
class matter is not the existence of a deficit, for that might be covered 
by raising all rates or in some other way. The true reason for the 
change is to apportion the cost of the service more equitably among 
the different classes of mail matter, and at present the second class 
pays far less than its share. We have already observed that if in the 
future there should be a substantial surplus in the post office it might 
well be applied to lowering the rate or, perhaps, better still, to mak¬ 
ing further improvements in the service for first-class mail. For 
there can be no doubt of the benefit to business and to the people at 
large of low rates and good service in the transportation of letters. 

The educational object. 

The original object in placing on second-class matter a rate far 
below that on any other class of mail was to encourage the dissemi¬ 
nation of news and of current literature of educational value. This 
object has been only in part attained. The low rate has helped to 
stimulate an enormous mass of periodicals, many of which are of 
little utility for the cause of popular education. Others are of ex¬ 
cellent quality, but the experience of the post office has shown the 
impossibility of making a satisfactory test based upon literary or 
educational values. To attempt to do so would be to set up a censor¬ 
ship of the press. Of necessity the words of the statute—“ devoted 
to literature, the sciences, arts, or some special industry ”—must have 
a broad interpretation. A “ legitimate list of subscribers ” has been 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 95 

insisted upon as an indication that a periodical is desired by the 
public, but this, while useful in excluding extreme cases, has not 
worked quite as was intended; and premiums, prizes and various in¬ 
ducements are largely offered to stimulate a demand. The statute 
expressly excludes not only publications intended primarily for ad¬ 
vertising purposes, but also those designed for circulation at nominal 
rates; yet those with the largest circulation are often sold at rates 
that do not nearly cover the cost; and, in fact, one of the objections to 
imposing a special rate on advertisements was that these permitted 
periodicals to be supplied to the public at much less than cost. 

Thus the educational purpose has been accomplished only in part; 
it is wholly impracticable to make a low rate for publications with a 
considerable educational value and a higher rate for the rest; and, 
under the actual working of the law, large business enterprises, which 
are maintained by the commercial advantages they offer as advertis¬ 
ing media, receive the benefit of a rate so low as to amount to a sub¬ 
vention by the Government. 

In these circumstances there would seem to be no reason why there 
should be such a wide difference between rate and cost, and it is the 
judgment of the Commission that there should be an increase in the 
charge for second-class mail in order that a more equitable adjust¬ 
ment may be made. 

On the other hand, the historic policy of encouraging by low postal 
rates the dissemination of current intelligence, and the extent to 
which it has proved successful, should not be overlooked. Enter¬ 
prises, those with slender resources as well as the large and highly 
successful—religious and philanthropic, together with those con¬ 
ducted for pecuniary gain—^have been established on the faith of 
this policy; and no change should be made which would seriously 
hamper the circulation of useful information or dislocate an industry. 
The increase should be a moderate one; and, after it has been pro¬ 
vided for, time should be allowed to permit the business to adapt 
itself to the new conditions before the change goes into effect. And, 
in addition, provision should be made in the department for the 
maintenance of an adequate cost system, so that the operation of 
rates may be observed continuously and accurately, and in the light 
of this experience the propriety of any further modifications may be 
determined. 

Different kinds of second-class mail. 

The first question that arises in regard to the rate is whether any 
discrimination should be made between different kinds of second- 
class matter. The plan proposed of charging a special rate for the 
portions of magazines devoted to advertisements seems open to grave 


96 


REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


practical objections. The amount of space given to advertising is 
no criterion of the educational value of a magazine; and, if the same 
provision were applied to newspapers, the attempt to measure the 
space occupied by advertisements would involve more labor than is 
consistent with the rapid dispatch of the daily press. 

Tlie Commission is further of the opinion that it would be a mis¬ 
take to discriminate between newspapers and magazines or other 
periodicals. So far as educational value is concerned no satisfactory 
distinction can be made. And we have no basis for the conclusion 
that the comparative cost of transporting and handling would justify 
a difference in rate. 

As has been said, the special statistics compiled by the department 
for the fiscal year 1908 did not distinguish between the subclasses of 
pound-rate matter, such as newspapers and the various sorts of peri¬ 
odicals. But in the weighings of 1906 ^ a separate record was made 
of (1) daily newspapers, (2) weekly and other than daily news¬ 
papers, (3) scientific periodicals, (4) educational periodicals, (5) 
religious periodicals, (6) trade-journal periodicals, (7) agricultural 
periodicals, (8) magazines, and (9) miscellaneous periodicals.^ Upon 
the percentages derived from this record, and upon an estimate of 
the average weight per copy in each of the subclasses, an apportion¬ 
ment has been made by the department of the total expenses assigned 
to pound-rate matter in its computation for 1908.® The following is 
the result showing the percentage for each of the above classes of 
pound-rate matter of the total expenses so attributed and the cost 
per pound on this basis. 


1 

Subclasses. 

2 

Estimated 

weight.* 

3 

Estimated 
total expenses 
for 1908.5 

4 

Per 
cent. 8 

5 

Estimated 
cost per 
pound.^ 

Daily newspapers. 

Weekly and other than daily newspapers. 

Scientific periodicals. 

Educational periodicals. 

Religious periodicals. 

Trade-journal periodicals. 

Agricultural periodicals. 

Magazines. 

Pounds. 

272,461,251 

122,111,090 

8,873,124 

6,140,778 

41,407,913 

33,520,692 

35,281,232 

141,124,928 

44,295,200 

$18,851,909.29 
12,942,166.49 
643,663.57 
414,373.59 
4,711,225.27 
2,168,906.95 
3,364,620.10 
11,429,539.93 
4,544,896.99 

31.91 

21.91 
1.09 

.70 
7.98 
3.67 
5.70 
19.35 
7.69 

6.91 
10.59 
7.25 
8.06 
11.37 
6.47 
9.53 
8.09 
10.26 

Miscellaneous periodicals. 

Total. 

704,216,208 

59,071,302.18 

100.00 

8.39 



1 Supra, pp. 17, 18. 

2 Report of Weighings, July 1 to Dec. 31, 1906, H. Doc. No. 651, 59th Cong., 2d sess.. 

Table E, p. 89. » 

* Tables M, N, O, P, Q, Exhibits 185, 186, 187, 188, 189; Memorandum relative to com¬ 
putation of cost in these tables. Exhibit 190 ; Typewritten Record, p. 2433. 

*The total estimated weight of pound-rate matter in the fiscal year 1908 is divided 
according to the percentages derived from the weighings of July 1 to Dec. 31. 1906. (See 
Table Q, Exhibit 189, column 2.) 

J The total expenses are those shown by the department’s table submitted Sept. 13, 1911. 
(See Table P, Exhibit 188, column 10; Exhibit 201, p. 38.) 

8 Table P, Exhibit 188, column 11. 

’ Table Q, Exhibit 189, column 8. 





















REPORT OF COMMISSION ON SECOND-CLASS MATTER. 


97 


We shall not review the criticisms that have been made of these 
tables, for they were not submitted upon the theory that data existed 
for an accurate apportionment of the expenses of 1908 among these 
sorts of mail matter. They were prepared in response to an inquiry 
by the Commission for such information as was available with respect 
to the relative mail cost of the subclasses described in the statute of 
1906. They represent simply an estimate, so far as it was possible to 
make one, by applying the percentages shown by the weighings in 
that year. These figures are the only basis we have for judgment as 
to the comparative cost of transporting and handling the different 
kinds of publications above mentioned; and it is evident that they 
furnish no sufficient foundation for a discrimination in rates between 
newspapers and periodicals—certainly not for a higher rate on maga¬ 
zines, for example, than on weekly newspapers. 

We conclude, therefore, that, whatever increase be made, should 
apply alike to newspapers and periodicals admitted to the second 
class, and that it is impracticable in the case of newspapers to charge 
a higher rate for space given to advertisements. It has been sug¬ 
gested that the proportion of this space should be limited for all 
second-class matter, but the true definition of such matter is that 
which is devoted primarily to the dissemination of news and of cur¬ 
rent literature and instruction, and we are not convinced that this 
can be measured by an arbitrary standard of the proportion of space 
given to advertisement. 

Present proposals of the department. 

We recur to the existing seven rates or variations of rates (as classi¬ 
fied by the department^) on second-class mail, as follows: 

(1) The general rate of 1 cent a pound on copies mailed by publishers to 
subscribers, to news agents, and as sample copies; and by news agents to their 
subscribers or to other news agents. 

(2) The free-of-postage privilege for copies mailed to subscribers residing in 
the county where the publications are printed and published, when not addressed 
for delivery from a city letter-carrier office. 

(3) The cent-a-pound rate on copies mailed for delivery by rural carriers on 
routes emanating from a city letter-carrier office. 

(4) The cent-a-pound rate on weekly publications mailed at a city letter- 
carrier office for local delivery. 

(5) The cent-a-copy rate for newspapers other than weeklies, and for period¬ 
icals not exceeding 2 ounces in weight, when mailed at a city letter-carrier office 
for local delivery by carriers. 

(6) The rate of 2 cents a copy for periodicals exceeding 2 ounces in weight 
when mailed at a city letter-carrier office for local delivery by carriers. 

(7) The rate of 1 cent for each 4 ounces for copies mailed by others than 
publishers and news agents; that is, the so-called transient rate. 

1 Supra, p. 13. Report of Third Assistant Postmaster General, 1911, p. 38. 

29552°—12-8 




98 REPORT OF COMMISSION ON SECOND-CLASS MATTER. 

The proposal of the Postmaster General, as submitted to the Com¬ 
mission,^ is (a) to abolish the requirement of 1 cent a pound on mat¬ 
ter otherwise free-in-county when mailed for delivery by rural car¬ 
riers on routes emanating from city letter-carrier offices; (b) to 
abolish the cent-a-copy rate for newspapers, and the rates of 1 cent 
and 2 cents a copy for periodicals when mailed at a city letter-car¬ 
rier office for local delivery by carriers, and to have all copies of 
second-class publications which are deposited in such offices by pub¬ 
lishers and news agents delivered at the pound rate; and (c) to 
establish a flat rate of 2 cents a pound on all paid second-class matter 
except transient. This would leave only three rates for second-class 
matter: 

(1) The existing free-in-county privilege retained, and extended so as to cover 
delivery by rural carriers on routes emanating from city carrier offices. 

(2) The rate of 2 cents a pound on copies mailed by publishers to subscribers, 
to news agents, and as sample copies; and by news agents to their subscribers 
or to other news agents. 

(3) The transient rate of 1 cent for each 4 ounces on copies mailed by others 
than publishers and news agents. 

To take up these recommendations in detail: The free-in-county 
privilege has been in force since 1851.^ Originally limited to weekly 
newspapers, it was extended in 1874 to all newspapers and in 1879 
to all second-class publications; ® but in its effect it may be regarded 
as a part of the settled policy of the Government to encourage the 
local country press. The Commission recognizes that this privilege 
is not likely to be withdrawn, but recommends that it be not further 
extended as suggested by the Postmaster General. It appears that 
at present on the rural routes not emanating from city carrier offices 
the mail matter in question is carried within the county without 
charge.* * Of the expenses apportioned for 1908 (exclusive of the 
general post-office expenses) the share of free-in-county matter was 
over $2,500,000, of which over $2,000,000 was found—on the basis 
of the count of May, 1911—to be its share of the cost of the rural 
delivery service.® 

The Commission finds no sufficient ground for the enlargement of 
this costly privilege. 

In the interest of simplification we approve the recommendation 
to abolish the copy rates for newspapers and periodicals when mailed 
at city carrier offices for local delivery. 

1 Exhibit 200, Statement of the Postmaster General, pp. 8-10. 

* Previously, under the act of 1845, there was a free privilege for newspapers of lim¬ 
ited size distributed within 30 miles of the place of printing. Supra, p. 9. 

3 Supra, p. 9. 

‘Typewritten Record, p. 904. 

® Supra, p. 79. 



REPORT OF COMMISSION ON SECOND-CLASS MATTER. 99 

The question of raising the rate on second-class matter mailed 
by publishers and news agents from 1 cent to 2 cents a pound is a 
more serious one. But we are of opinion that the change is reason¬ 
able and should be made. To deny such a moderate increase is vir¬ 
tually to say that the present rate, despite the heavy loss it entails, 
must be deemed satisfactory, or if not that it is wholly impracticable 
to attempt any change in it. We regard either conclusion as with¬ 
out foundation. 

Such an increase will not, in the opinion of the Commission, bring 
distress upon the publishers of newspapers and periodicals, or seri¬ 
ously interfere with the dissemination of useful news or information. 
A reasonable time should be allowed, after the rate is fixed, before 
it is put into effect. While the new rate will be very far from 
compensating the Government for the carriage and handling of 
second-class matter, it will to some extent relieve the existing burden 
and result in a more equitable adjustment of rates. 

Conclusions as to rates. 

Accordingly, we recommend the following rates for second-class 
mail: 

(1) The rate of 2 cents a pound on copies mailed by publishers to subscribers, 
to news agents, and as sample copies; and by news agents to their subscribers 
or to other news agents. 

(2) The rate of 1 cent for each 4 ounces for copies mailed by other than 
publishers and news agents; that is, the present transient rate. 

(3) The present free-in-county privilege retained, but not extended. 

Further, as we have said, the department should maintain an 
adequate cost system, so that the effect of the new rates may be 
closely observed and a proper basis may be secured for the consid¬ 
eration of any future proposals. 

Other matters discussed before the Commission. 

The Third Assistant Postmaster General pointed out forcibly in 
his statement before the Commission the difficulties in applying the 
existing law to particular cases, and the need for more precise 
definitions and for more adequate provisions for the prevention of 
described abuses. And, in furtherance of this purpose, the depart¬ 
ment submitted to the Commission the draft of a bill “To amend 
and consolidate the laws pertaining to second-class mail matter.” 

While a revision of the statute may be highly desirable, we do not 
understand that Congress intended that it should be undertaken by 
this Commission, and recommendations as to the form and content 
of new legislation of this character cannot be regarded as within 



100 BEPOET OF COMMISSION ON SECOND-CLASS MATTEK. 

either the letter or the spirit of the joint resolution. We therefore 
express no opinion upon the proposed bill. 

Other suggestions have been made by publishers and others, look¬ 
ing to the amendment of the law and to the modifying of depart¬ 
mental regulations as to second-class matter. Thus, it has been 
strongly urged by representatives of professional, scientific, benevo¬ 
lent, and fraternal societies, and of trade unions, in opposition to the 
construction placed by the department upon the act of July 16, 1894, 
that they should be entitled under the second-class rate to carry 
in their publications general advertising matter. But, in view of 
the limited nature of the present inquiry as defined by the resolution, 
we do not consider the subject of these proposals or of others relat¬ 
ing to statutory and administrative changes to be within our 
province. And as to these matters we make no recommendations. 

Eespectfully, 


Charles E. Hughes, 
A. Lawrence Lowell, 
Harry A. Wheeler. 








___ 

P “' . . 

t%. • . ■ •► ‘ 


♦ . V- * 

' 4 * 


7*>j 




' J- f 


V. 'VV* 

•MJf 

^,i 'S* •»■ 

t ' ■ 

* ’ •>, ‘ 

U ' 


i' s"Av '■^'< 



'■ ’-v.t 

t 

1 

**•» 

* 

■ •’L 

< 1 

•# 


» »' • ' 

♦ ^ 

' ** 



■ Assf^l, ,■ 

li 




/i 



lii >> 

^5- "jtfi' ' - 

w. . ? 





4 - 


J. , 

'L» ^ t 


.a 


/ 


.■■’ ■.! • 
j*- < 


<- 

u 


V^v 


V ( 


*• . i ■ 


»*■“.« 1 'I - - , 

- . 7* • <■ * 


V *> 
'■. ► • 





r-> 


VI 




t'» 
4 





4 - ” 


• <>' 


»•. < p T 


- 




t 


4' 


♦ 4 ■ 4 


:5t^' 
K*/-v‘ 


- > 


‘I. 




* r 


V 

S. •'*. 


v“' jy 

i .£ 






V-S W 


H’w 






■:'. 'i .v‘ 






V( 







r A ’ • • 

v» »\*. 

• I* '•.*'. 


*:<' 


'Hi 









f 


r 

i ' V# 


v» 


» 


• » 


I 



4 







g * 

V 

' .» 


i 


• / 





* • 


r i 


i_> 


V 




# ■ . 


c> 


4 




if 


1 ff 







« 


if 


. i. 

# • 
W 


> 


t 

>• 

f' 





i 


k « 


r 




j* 



^ j 






I 


I ^ 


« 


k* 







4 




4 


N- 1 



f- - 





1 











































































































































































































































































































































